UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-KSB


                   Annual Report Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                  For the fiscal year ended September 30, 2001

                         Commission file number: 2-42114

                           Local Telecom Systems, Inc.
                           ---------------------------
                 (Name of Small Business Issuer in Its Charter)
                      (Formerly Signature Motorcars, Inc.)

               State of Nevada                      75-1310613
               ---------------                      ----------
     (State or Other Jurisdiction of     (I.R.S. Employer Identification No.)
      Incorporation or Organization)

                          3537 West 7th Street, Suite 5
                             Fort Worth, Texas 76107
                             -----------------------
                    (Address of Principal Executive Offices)

           Issuer's Telephone Number including Area Code: 817 675-4237

           Securities registered pursuant to Section 12(g) of the Act:

                         Common stock, par value $0.0167

The issuer (1) has filed all reports required to be filed by Section 13 or
15(d)of the Securities Exchange Act of 1934 during the preceding 12 months, and
(2)has been subject to such filing requirements for the past 90 days.
            Yes         No    X

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year......$17,527.........

Currently no trading market exists for the voting stock (6,571,229 shares) held
by non-affiliates of the Registrant on September 30, 2001. The number of shares
outstanding of the Registrant's common stock on September 30, 2000, was
10,648,182 shares. On September 30, 2001, the Company had 10,813,182 shares
outstanding. Current number of shares outstanding as of August 16, 2002 is
39,330,582 which includes the acquisition of Local Telecom Systems, Inc. - See
Subsequent Events in Item 1.


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                              TABLE OF CONTENTS


PART I.......................................................................1
      Item 1.   Description of Business......................................1
            (a) Business Development.........................................1
            (b) Business of Issuer...........................................3
      Item 2.   Description of Property......................................7
      Item 3.   Legal Proceedings............................................7
      Item 4.   Submission of Matters to a Vote of Security Holders..........7

PART II......................................................................7
      Item 5.   Market for Common Equity and Related Stockholder Matters.....7
            (a) Market Information...........................................7
            (b) Holders......................................................8
            (c) Dividends....................................................8
      Item 6.   Plan of Operations..........................................10
      Item 7.   Financial Statements........................................13
      Item 8.   Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure....................................14

PART III....................................................................14
      Item 9.   Directors, Executive Officers, Promoters and Control
                Persons.....................................................14
      Item 10.  Executive Compensation......................................15
      Item 11.  Security Ownership of Certain Beneficial Owners and
                Management..................................................15
      Item 12.  Certain Relationships and Related Transactions..............16
      Item 13.  Exhibits and Reports on Form 8-K............................17

INDEX TO EXHIBITS...........................................................19



<PAGE>

                                    PART I

Item 1.   Description of Business

(a) Business Development

Local Telecom Systems, Inc. (the "Company" includes references for predecessors
and subsidiaries unless indicated otherwise) was organized on February 19, 1969,
as a corporation under the laws of the State of Nevada, under the name of
International Royalty & Finance Co. for the general purpose of engaging in
exploration for oil and gas, and on December 23, 1971, the name of the Company
was changed to International Royalty & Oil Co. (IROC). Again on July 10, 1996,
the Company changed its name to Signature Motorcars, Inc., in anticipation of
entry into the car rental business; however, the anticipated merger was never
consummated. In 1997, the Company shifted its activities back to its former
direction of acquiring working interests, royalties, and overriding royalties in
oil and gas properties within the United States and in foreign countries.
However, with the decline of oil and gas prices in 1998, the Company began
evaluating opportunities in other industries. On February 22, 2002 the Company
entered into a merger agreement with Local Telecom Systems, Inc. and changed its
name to Local Telecom Systems, Inc. See Item 4 "Submission of Matters to
Security Holders" for additional information.

During the period from October 1, 1995, to September 30, 1999, the Company
conducted minimal business, received nominal income and had minimal assets or
liabilities. The Company had limited activity during this period of time.

The Company discontinued its oil and gas operations in 1999 and continued to
divest itself of all oil and gas working interest holdings during fiscal years
2000 and 2001. The Company maintained its Canadian royalty interests and
acquired several small royalty interests in Texas. These royalty interests were
conveyed into International Royalty & Oil Co., a subsidiary, on February 22,
2002.

From October 1, 1999, through September 30, 2001, the Company was involved in
raising working capital through the issuance of its common stock and the
diversification of its asset base while positioning itself for a merger.

During its fiscal years ended September 30, 2000 and 2001, the Company was not
involved in any bankruptcy, receivership, or similar proceeding and underwent no
material reclassification, merger, or consolidation. The Company did subsequent
to the end of the fiscal year ended September 30, 2001, enter into a merger
agreement with Local Telecom Systems, Inc. as well as effect a partial
distribution of the Company's assets - See following section "Subsequent Events"
and "Former Subsidiaries" for additional information.

The Company, now known as Local Telecom Systems, Inc. (LTSI), offers local and
long distance service on a prepaid basis. Specifically, local services include a
"bare bones" product providing unlimited local dial tone and 911 emergency
access with the option of several custom calling features, for additional fees,
including Call Waiting, Caller ID, Call Forwarding and Speed Dialing. These
features may be purchased individually or in a package at reduced rates.

LTSI purchases phone services from the incumbent local exchange carrier ("ILEC")
at deep discounts (currently up to 26%) and resells the service on a prepaid
basis at a premium, allowing attractive profit margins. The markets are
households without phone service due to lack of credit history or a poor credit
history, and/or the inability to pay a deposit.



                                      1

<PAGE>


LTSI is a flat rate service provider with a customer base of approximately 1,200
in Texas, New Mexico and Arizona. LTSI is not a measured service provider, which
is when service is provided on a per call or minute basis. LTSI now has the
licenses in place to expand into 42 more states for a total of 45 states plus
the District of Columbia. See Item 1(b) "Business of Issuer" for additional
information.

Subsequent Events

During the spring of 2001 management of the Company began meeting with Local
Telecom and initiated its due diligence process. During this due diligence
process Local Telecom was seeking to acquire licenses for additional
states for expanding their service area. A special meeting of stockholders was
held on February 22, 2002, at which holders of a majority of the outstanding
common stock of the Company voted to approve the merger with Local Telecom
Systems, Inc. The terms of the merger approved at the meeting were: (1) to
change the name of the Company to Local Telecom Systems, Inc.; (2) effect a
reverse stock split on the outstanding common stock on a four-for-five (4-for-5)
basis which reduced the number of outstanding common shares from approximately
15,000,000 to 12,000,000; and (3) approve the issuance of up to 27,335,854
restricted common shares for the acquisition of the property, rights,
privileges, licenses, agreements, tariffs, leases and up to 11,374,146
restricted shares allocated for the future funding of Local Telecom Systems,
Inc. See Item 4 Submission of Matters to Security Holders for additional
information.

From April 18, 2002 until August 15, 2002 the Company was working with the
principles in the preparation of the various license agreements held in 42
states and documenting the transfer of these rights in compliance with state and
federal laws.

August 15, 2002 was the effective date of this acquisition. On this date the
Company released the 27,335,854 restricted shares to the principles of this
acquisition and in return they convey the property, rights, privileges,
agreements, tariffs and the 42 license agreements to LTSI. The Company issued an
additional 2,719,818 restricted common shares for consulting services for the
acquisition and funding arrangements for the merger with Local Telecom Systems,
Inc. These shares were adjusted after the 4 for 5 reverse stock split to
2,175,854 restricted common shares representing a 5.6% fee for the services
rendered in connection with this acquisition. The sole consideration for these
consulting services was restricted shares of the Company's common stock.

At the same shareholders' meeting held on February 22, 2002, the holders of
majority of outstanding common stock approved stock dividends to the
shareholders of 100% of the outstanding common stock of the Company's four
wholly owned subsidiaries. The effective date of these stock dividends was April
15, 2002, prior to the effectiveness of the merger with LTSI. Each stock
dividend was approved on the basis of one (1) share of each subsidiary for every
three (3) shares of the Company's common stock owned. Pursuant to these stock
dividends, the ownership of the following subsidiaries was transferred from the
Company directly to the shareholders on a pro rata manner: International Royalty
& Oil Co., Signature Financial Services, Inc., Cumberland Continental Corp., and
Signature Healthcare, Inc. Each former subsidiary company now has 100,000,000
shares authorized for issuance, 5,217,179 shares of restricted common stock
issued and outstanding, par value of $0.001 per share. The record date for the
distribution of the 5,217,179 common shares in each of the four companies was
April 15, 2002 at no additional cost to the existing shareholders.

The following is a division of the assets of the Company to the subsidiaries:

Former Subsidiaries:

International Royalty & Oil Co.
The IROC patented enhanced oil recovery "EOR" process, Canadian oil and gas
royalty interests, Texas oil and gas royalty interests and stock held in two
small resource companies. In 1999 the Company organized a wholly owned
subsidiary, International Royalty & Oil Co., a Nevada corporation, for the
purpose of maintaining the patent rights for the IROC EOR Process, Canadian oil
and gas royalty interests, Texas oil and gas royalty interests and stock held in
two small resource companies.


                                      2
<PAGE>


Signature Financial Services, Inc.
Broadband Wireless International Corporation $50,000 promissory note, promissory
note with collateral being oil and gas leases covering approximately 1,500 acres
located in Upton County, Texas and a Gulf Coast Seismic Database covering South
Louisiana and Southeast Texas. In 2000 the Company organized a wholly owned
subsidiary, Signature Financial Services, Inc., a Nevada corporation, for the
purpose of segregating its financial transactions and investment portfolio. The
assets of Signature Financial Services, Inc. are two Promissory Note
Receivables. During the first quarter of the fiscal year 1999/2000, the Company
did a joint venture and secured financing for the acquisition of an
approximately 1,500 acre oil and gas lease in Upton County, Texas through a loan
of $151,000 bearing 10% simple interest. In March of 2000 the Company loaned to
BroadBand Wireless International Corporation (BBAN) of Oklahoma City, Oklahoma,
$50,000 at 10% simple interest. BBAN is the subject of Chapter 11 Bankruptcy
proceedings.

Signature Healthcare, Inc.
In 2001 the Company organized a wholly owned subsidiary, Signature Healthcare,
Inc., a Nevada corporation, for the purpose of entering into the custom medical
packaging industry through the acquisition of National Healthcare, Inc. of
Montour Falls, New York. National Healthcare, Inc. owns and operated a facility
for the ophthalmology health field.  On August 24, 2001, Signature Healthcare,
Inc. entered into an agreement with National Healthcare, Inc. of New York. The
stipulated terms of the agreement were not met by December 31, 2001.  From
August 24, 2001 until December 31, 2001 Signature Healthcare, Inc. raised
$100,000 through the placement of 200,000 shares of its restricted common stock
from one accredited investor. Signature Healthcare also arranged working capital
loans for approximately $150,000. Negotiations are in progress with the
principles of National Healthcare, Inc. and related entities to resolve these
issues and create an ongoing business.

Cumberland Continental Corp.
Note receivable of $150,000 from Telkin Sheetmetal, Inc., secured by contract
retainage and bearing 9% simple interest.

(b) Business of Issuer

The Company raised $583,984 in working capital during 2000 and 2001 through the
issuance of its common stock to primarily accredited investors and less than 25
non-accredited investors, and diversified its asset base prior to the merger
with LTSI previously noted in this section.

LTSI is a local telephone service reseller with an acquired three-year-old
customer base in Texas, New Mexico and Arizona. LTSI has the necessary licenses
and interconnect agreements to offer, on a national basis, prepaid local
telephone service and various ancillary products such as 911, caller ID and
prepaid long distance in 45 states. The following are brief highlights of LTSI
business:

      Experience - LTSI management has been in the prepaid industry since 1997
      shortly after the passage of the Telecommunications Act of 1996 and has
      years of experience in the prepaid local telephone reseller niche,
      primarily the Hispanic market. LTSI also has consulting contracts with
      individuals that have extensive communications experience.

      Hispanic Market - The Hispanic market has a higher growth rate than other
      demographic sectors, unusual brand loyalty, and twice the national average
      propensity for prepaid telephone service.




                                      3

<PAGE>


      Economics - The prepaid telephone service reseller business has attractive
      margins, minimal capital expense and minimal bad debt. LTSI acquires
      heavily discounted telephone service from the incumbent local exchange
      carriers, such as Southwestern Bell, Bell South, Sprint, Verizon and Qwest
      and charges premium rates yielding above average profit margins.
      Additionally, customers must pay prior to receiving service, thereby
      mitigating bad debts.

      Regulatory Approvals - LTSI possesses regulatory approval to sell and
      provide local and long distance phone service in 45 states plus the
      District of Columbia. This nationwide "footprint" affords LTSI an
      advantage over many competitors, as it is a very arduous and
      time-consuming process to acquire approvals from each state's Public
      Utility ("PUC") Commission and Secretary of State. The footprint allows
      LTSI flexibility in terms of market selection and service deployment. LTSI
      is not licensed in Arkansas, Missouri, Oklahoma, Alaska and Hawaii.

Risk Factors

Termination of License/Certificate - Failure to pay Utility Tax, Line Charge or
license fees in the states in which we operate would result in a termination of
LTSI's license and/or certificate within the state. Unauthorized change in
service provider, known as "Slamming", would also terminate a license or
certificate to do business as a reseller of local phone service. Although the
Company does not intend on allowing any of these events to occur, if any do
occur, the Company would be prohibited from engaging in the local telephone
service market, which would have a material adverse effect on the Company.

Dependence on Third Parties - The Company depends on many consultants, vendors
and suppliers to conduct business. For example, the Company uses a billing
service to mail the monthly invoices to our customers and the Company also uses
a telemarketing company for subscribing new customers during an advertising
campaign. LTSI is not equipped with the necessary personnel or equipment to
handle either of these services and is therefore dependent to outsource these
types of services. A loss of any one of these third parties would significantly
disrupt our operations.

Dependence Upon Management - The operations and financial success of the Company
are significantly dependent on the managerial personnel of the Company, Tracey
Norris and William Miertschin. In the event that the management of the Company
becomes unable or unwilling to continue to direct its operations, the Company
could be adversely affected.

Incumbent Local Exchange Carrier (ILEC) - The Company purchases phone lines from
the ILEC at a discount and resells the lines on a prepaid basis; however, the
ILEC companies could offer those same lines to our customers. For the most part
the ILECs are not interested in this market and have set their pricing and
restrictions to exclude most of our target market. However, ILECs may compete
directly with the Company, which would drastically increase competition and
likely impair our business.

Incumbent Based Operation - We are a resale based operation and not a facility
based operation and therefore any Acts of God, Terrorist acts or Union Strikes
that cause phone service to be interrupted will result in our total dependence
on our ILEC provider to restore operations in a timely fashion. Poor service
provided by our ILEC could result in the loss of customers to our Company.

The Financial Difficulties of Other Competitive Communications Providers Could
Adversely Affect our Financial Results - Many competitive local exchange
carriers and other emerging communications providers have experienced
substantial financial difficulties over the past year, in some cases leading to
bankruptcies and liquidations. The financial difficulties of these companies
could reflect poorly on the Company's financial stability, may diminish its
ability to obtain further working capital and may adversely affect the
willingness of potential customers to move their communications services to a
competitive local carrier like Local Telecom Systems, Inc.


                                      4

<PAGE>


Competition and Markets

The telecommunications industry is highly competitive. The Company believes that
the principal competitive factors affecting its business are pricing levels and
clear pricing policies, customer service, accurate billing and, to a lessor
extent, variety of services. The Company's ability to compete effectively
depends upon its continued ability to maintain high quality, market-driven
services at prices generally equal to or below those charged by our competitors.
To maintain our competitive posture, we believe we must be in a position to
reduce our prices in order to meet reductions, in rates, if any, by others. Any
such reductions could materially adversely affect us. Many of our current and
potential competitors have financial, personnel and other resources, including
brand name recognition, substantially greater than we do or expect to have in
the near term.

Telephone service providers like LTSI are subject to competition from other
providers including those incumbent local exchange carriers from which LTSI
purchases phone lines. As a result of the Telecommunications Act of 1996,
telephone companies are no longer afforded exclusive franchise service areas.
Under that Act, competitors can offer telephone services to LTSI subscribers.
The Act contemplates that various regulations will be promulgated by the Federal
Communications Commission ("FCC") and state regulatory agencies to implement
various parts of the Act, such as regulations setting out the procedures and
methodologies for implementing and promoting competition in the telephone
industry. The regulations could have a material adverse effect, and the Act does
open the opportunity for others to be competitive for the same markets.

LTSI is initially targeting Hispanic households in the United States that
currently do not have telephone service. This sector presents opportunity, as
Hispanics: are growing at a rate faster than the national average; tend to be
brand loyal; have a higher than average number of residents in the home creating
a need for service; have favorable feature and long distance use; and are easier
to target market than other segments, as they tend to watch specific television
programming formats and networks during less expensive time periods, allowing
for reduced advertising costs. Other local exchange carriers that target this
same sector include, but are not limited to, Smoke Signal, 4Aphone and ComSouth.

The Act of 1996 has significantly increased the level of competition in our
local exchange markets. One of the purposes of the 1996 Act was to ensure, and
accelerate, the emergence of competition in local exchange markets. Toward this
end, the 1996 Act requires most existing local exchange carriers (incumbent
local exchange carriers, or ILECS's), to permit competitive local exchange
carriers, or CLEC's, including our Company, to purchase service from the ILEC
for resale to CLEC customers and interconnect the CLEC's network with the ILEC's
network. As a result, competition in the local exchange markets is expected to
continue to increase.

Governmental and Other Regulations

LTSI is subject to regulation by the Public Utility Commission, FCC and
each of the Utilities Boards in each state in which LTSI holds a
license/certificate. LTSI operates our telephone businesses pursuant to
license/certificates and various rules and regulations promulgated by these
agencies. Although not anticipated to occur, these agencies have the authority
to terminate LTSI's right to provide services if they fail to comply with those
rules and regulations.

Agencies, like the FCC, require us to file periodic reports, pay various fees
and assessments, and comply with rules governing quality of service, consumer
protection, and similar issues. Although the specific requirements vary from
state to state, they tend to be more detailed than the FCC's regulation because
of the strong public interest in the quality of basic local exchange service. We
intend to comply with all applicable state regulations, and as a general matter
do not expect that these requirements of industry-wide applicability will have a
material effect on our business. However, no assurance can be given that the
imposition of new regulatory burdens in a particular state will not affect the
profitability of our services in that state.


                                      5

<PAGE>


Under the Telecommunications Act, any entity, including cable television
companies, electric and gas utilities may enter any telecommunications market,
subject to reasonable state regulation of safety, quality and consumer
protection. Because implementation of the Telecommunications Act, LTSI is
subject to numerous federal and state policy rulemaking proceedings and judicial
review. There is still uncertainty as to what impact such legislation will have
on us.

The Telecommunications Act is intended to increase competition. This Act was
designed to open the local services market by requiring incumbent local carriers
to permit interconnection to their networks and establishing incumbent local
carriers' obligations with respect to:

      Reciprocal Compensation. Requires all local exchange carriers to complete
      calls originated by competitive local exchange carriers under reciprocal
      arrangements at prices based on tariffs or negotiated prices.

      Resale. Requires all incumbent local carriers and competitive local
      carriers to permit resale of their telecommunications services without
      unreasonable restrictions or conditions. In addition, incumbent local
      carriers are required to offer wholesale versions of all retail services
      to other telecommunications carriers for resale at discounted rates, based
      on the costs avoided by the incumbent local carrier in the wholesale
      offering.

      Interconnection. Requires all incumbent local carriers and competitive
      local carriers to permit their competitors to interconnect with their
      facilities. Requires all incumbent local carriers to permit
      interconnection at any technically feasible point within their networks,
      on nondiscriminatory terms, at prices based on cost, which may include a
      reasonable profit. At the option of the carrier seeking interconnection,
      co-location of the requesting carrier's equipment in the incumbent local
      carriers' premises must be offered, except where an incumbent local
      carrier can demonstrate space limitations or other technical impediments
      to co-location.

      Number Portability. Requires all incumbent local carriers and competitive
      local carriers to permit users of telecommunications services to retain
      existing telephone numbers without impairment of quality, reliability or
      convenience when switching from one telecommunications carrier to another.

      Dialing Party. Requires all incumbent local carriers and competitive local
      carriers to provide "1+" equal access to competing providers of telephone
      exchange service and toll service, and to provide nondiscriminatory access
      to telephone numbers, operator services, directory listing, with no
      unreasonable dialing delays.

      Access to Rights-of-Way. Requires all incumbent local carriers and
      competitive local carriers to permit competing carriers access to poles,
      ducts, conduits and rights-of-way at regulated prices.

Incumbent local carriers are required to negotiate in good faith with carriers
requesting any or all of the above arrangements. If the negotiating carriers
cannot reach agreement within a prescribed time, either carrier may request
binding arbitration of the disputed issues by the state regulatory commission.
Where an agreement has not been reached, incumbent local carriers remain subject
to interconnection obligations established by the FCC and state
telecommunications regulatory commissions.

Personnel

As of September 30, 2001, the Company did not have any full time employees;
however, the Company does retain personnel for its stock transfers and
administrative services. The president and the secretary, under the direction of
the Board of Directors, performed the daily operations of the Company until the
merger became effective with Local Telecom Systems, Inc. on August 15, 2002. The
Company now has nine (9) full time employees plus both full and part-time
consultants.

                                      6

<PAGE>


Item 2.  Description of Property

On September 30, 2001 the Company held certain assets that consisted primarily
of Notes Receivables, Seismic Library, small oil and gas overrides and patented
oil recovery process. These assets were distributed to its wholly owned
subsidiaries subsequent to September 30, 2001. For additional information: See
Item 1. "Description of Business - Former Subsidiaries."

Subsequent to the end of the fiscal year ended September 30, 2001 the Company
transferred all of its assets to the subsidiaries upon entering into an
agreement to merge with Local Telecom Systems, Inc. (LTSI).

LTSI corporate offices are located at 3537 West 7th Street, Suite 5, Fort Worth,
Texas. These offices are leased by LTSI from Llewellyn Realty. The monthly
rental payable by LTSI is $3,100. LTSI also pays the utilities and insurance.
The office lease is a month-to-month lease.

LTSI believes that its real estate, buildings, and other improvements are
adequate to conduct their businesses as conducted or proposed to be conducted on
the date of this filing. LTSI also believes that its buildings and improvements
have been maintained in good repair and condition, ordinary wear and tear with
depreciation excepted. LTSI also believes the buildings and improvements are
adequately insured. LTSI is not a hardware (facility) based telecommunications
company. Equipment consists mainly of office furniture and equipment such as
computers, telephone systems and fixtures. Value of said equipment is not
material.

Item 3.  Legal Proceedings

As of September 30, 2001, there were no legal proceedings to which the Company
was a party, and no litigation is known to be pending against the Company.
However, subsequently the Company is pursuing a collection proceeding for the
$50,000 loan made to Broadband Wireless International Corporation secured by a
promissory note.

Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fiscal year
ended September 30, 2001.

Subsequent to fiscal year end, holders of a majority (7,829,179 shares of
15,000,000 outstanding shares) of the Company's outstanding shares of common
stock met at a special meeting of stockholders on February 22, 2002, and voted
to approve the merger acquisition of Local Telecom Systems, Inc. (LTSI) and
restructure the Company for that purpose with a four (4) shares for five (5)
shares reverse stock split and the issuance of new shares for the acquisition of
LTSI and related assets. At the same meeting it was also approved to distribute
stock in each of the four wholly owned subsidiaries to the existing stockholders
on a one (1) share for three (3) shares basis with no additional cost. All
7,829,179 shares voted for each matter and no shares voted against any matter
and no shares abstained from voting on any matters.

                                   PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

(a) Market Information

Currently no trading market exists for the Company's shares, and no trading
market existed for the voting stock (6,571,229 shares) held by non-affiliates of
the Registrant on September 30, 2001. However, the Company's stock was trading
on the over-the-counter market of the Electronic Bulletin Board until 1996. On
September 30, 2001 the Company had 850,000 warrants outstanding to purchase
850,000 shares of the Company's common stock at an exercise price of 20 cents
per share. Subsequent to the end of the fiscal year, 650,000 warrants were
exercised at 20 cents per share prior to the pending merger with Local Telecom
Systems, Inc. There are 200,000 warrants outstanding as of August 16, 2002, with
an exercise price of 20 cents that expire on January 20, 2003.



                                      7
<PAGE>


On September 30, 2001 the Company had 10,813,182 shares issued and outstanding
of which the Company believes it had 7,415,953 shares that could be sold
pursuant to Rule 144 under the Securities Act of which 4,025,953 shares are held
by officeres and directors.  The Company also believes it has 538,400 shares not
eligible for Rule 144 of the Securities Act on September 30, 2001 and all other
shares are freely tradable.

On August 16, 2002 the Company had 39,330,582 shares issued and outstanding of
which the Company believes it has 4,611,163 shares that can be sold pursuant to
Rule 144 under the Securities Act of which 4,021,163 shares are held by
officers and directors. The Company also for Rule 144 of the Securities Act on
August 16, 2002 and all other shares are freely tradable.

(b) Holders

The approximate number of security holders of record of the Company's common
stock on August 16, 2002, was 1,506. Additional stockholders hold stock in
street name; the number of holders in street name is not available to the
Company.

(c) Dividends

The Company has not declared a cash dividend or paid dividends in the past.
However, in April 2002, the Company did effect a stock distribution of 5,217,179
restricted common shares of each of its subsidiary companies (International
Royalty & Oil Co., Signature Healthcare, Inc., Signature Financial Services,
Inc. and Cumberland Continental Corp.) on a one (1) share for three (3) shares
pro rata basis to all of the  Company's stockholders as of April 15, 2002. See
Item 1. "Description of  Business" for "Subsequent Events" and "Former
Subsidiaries", and Item 4.  "Submission of Matters to a Vote of Security
Holders."

Issuance of Unregistered Shares

During the year ended September 30, 2000, the Company issued securities in the
transactions below without registering the securities under the Securities Act
of 1933. No underwriter, sales or placement agent was involved in any of the
transactions.

On December 7, 1999 the Company issued 478,000 restricted common shares. Of
these shares 378,000 were issued to its officers and directors for services
(William R. Miertschin, Elizabeth Webb, Victoria Lucas, Ivan Webb, Howard
Siegel) and 100,000 was issued to Bryan Gossett for consultant services
regarding the oil and gas leases in Upton County, Texas. These restricted shares
were issued in reliance on the exemption from registration including, but not
limited to, Sections 3(b) and/or 4(2) of the Securities Act of 1933.

On December 20, 1999 the Company sold 550,000 (at $0.20 per share) restricted
common shares with warrants attached to purchase an additional 850,000
restricted common shares with an exercisable price of $0.20 per share to expire
in January 2003. The Company received from this private placement of its common
stock $90,000 in cash plus 100,000 shares of tradable shares in another public
company valued at $20,000. These restricted shares were issued to three
accredited investors in reliance on the exemption from registration including,
but not limited to, Sections 3(b) and/or 4(2) of the Securities Act of 1933.

On February 1, 2000 the Company sold 667,844 (at $0.20 per share) restricted
common shares for $100,175 in cash and $33,399 for overrides on four oil and gas
leases located in Comanche County, Texas. These restricted shares were issued to
several accredited investors in reliance on the exemption from registration
including, but not limited to, Sections 3(b) and/or 4(2) of the Securities Act
of 1933.

On February 29, 2000 the Company sold 1,335,500 (at $0.20 per share) restricted
common shares for $267,100. These restricted shares were issued to less than 25
accredited investors in reliance on the exemption from registration including,
but not limited to, Sections 3(b) and/or 4(2) of the Securities Act of 1933.


                                      8

<PAGE>


On April 21, 2000 the Company sold 645,000 (at $0.20 per share) restricted
common shares for $129,000. These restricted shares were issued to less than 10
accredited and non-accredited investors in reliance on the exemption from
registration including, but not limited to, Sections 3(b) and/or 4(2) of the
Securities Act of 1933.

On December 7, 2000 the Company issued 628,000 restricted common shares. Of
these shares 378,000 were issued to its officers and directors for services
(William R. Miertschin, Elizabeth Webb, Victoria Lucas, Ivan Webb, Howard
Siegel) and 150,000 was issued to Robert Anderson and 100,000 restricted shares
to Robert Peterman for consultant services for an oil and gas project in South
Texas and for services associated with the acquisition of a Coastal Seismic
Library Database of South Louisiana and Southeast Texas. These restricted shares
were issued in reliance on the exemption from registration including, but not
limited to, Sections 3(b) and/or 4(2) of the Securities Act of 1933.

During the year ended September 30, 2001, the Company issued securities in the
transactions below without registering the securities under the Securities Act
of 1933. No underwriter, sales or placement agent was involved in any of the
transactions.

On April 2, 2001 the Company issued 165,000 restricted common shares for
consideration to Benjamin Botello to extend a note for the Troell oil and gas
lease located in Atascosa County, Texas. Of the 165,000 shares issued for this
extension 15,000 were issued to Robin Ziek, a Houston, Texas attorney, for
professional fees to prepare the legal documentation for the extension. These
restricted shares were issued in reliance on the exemption from registration
including, but not limited to, Sections 3(b) and/or 4(2) of the Securities Act
of 1933.

Issuance of Unregistered Shares Subsequent to Fiscal Year End

Subsequent to the year ended September 30, 2001, the Company issued securities
in the transactions below without registering the securities under the
Securities Act of 1933. No underwriter, sales or placement agent was involved in
any of the transactions.

On October 25, 2001 the Company issued the following restricted shares of common
stock to the following persons in exchange for their services: Karen Lee (10,000
shares), Robert Anderson (25,000 shares), Amber Smith (15,000 shares), J.V.
Rhyne (10,000 shares), Benjamin Botello (45,000 shares), Barbara Williams (1,000
shares), Susie Hare (1,000 shares) and Melissa Eason (1,000 shares). The Company
also sold to Dale Houlette, an existing shareholder, 25,000 restricted common
shares for $5,000. All of these restricted shares were issued in reliance on the
exemption from registration including, but not limited to, Sections 3(b) and/or
4(2) of the Securities Act of 1933.

On December 7, 2001 the Company issued 228,000 restricted common shares as
compensation to its officers and directors (William R. Miertschin, Victoria
Lucas and Howard Siegel). These restricted shares were issued in reliance on the
exemption from registration including, but not limited to, Sections 3(b) and/or
4(2) of the Securities Act of 1933.

On March 19, 2002 the Company issued 350,000 restricted common shares when
Stephen Grosberg, an existing shareholder, exercised 350,000 warrants. These
warrants were issued in conjunction with the private placement of stock made on
December 20, 1999, stated above. The exercise price was $0.20 per share and
resulted in cash to the Company of $70,000. These restricted shares were issued
in reliance on the exemption from registration including, but not limited to,
Sections 3(b) and/or 4(2) of the Securities Act of 1933.

On April 1, 2002 the Company issued 300,000 restricted common shares when
Herbert Wolas, an existing shareholder, exercised 300,000 warrants. These
warrants were issued in conjunction with the private placement of stock made on
December 20, 1999, stated above. The exercise price was $0.20 per share and
resulted in cash to the Company of $60,000. These restricted shares were issued
in reliance on the exemption from registration including, but not limited to,
Sections 3(b) and/or 4(2) of the Securities Act of 1933.


                                      9

<PAGE>


On February 15, 2002 the Company issued 2,719,818 restricted common shares for
consulting services to Graford Communications Group and Copano Bay Associates,
Texas general partnerships partially owned by Richard M. Hewitt, a director, and
two accredited investors, for the acquisition and for providing funding
arrangements for the merger with Local Telecom Services, Inc. These consulting
services received only restricted shares for compensation. These restricted
shares were issued in reliance on the exemption from registration including, but
not limited to, Sections 3(b) and/or 4(2) of the Securities Act of 1933.

In addition, prior to the merger with LTSI, on April 15, 2002, the Company made
unregistered distributions in the form of stock dividends to the existing common
shareholders of the Company of common stock of Signature Healthcare, Inc.,
Signature Financial Services, Inc., Cumberland Continental Corporation and
International Royalty and Oil Co., Inc., each of which were originally wholly
owned subsidiaries. In each instance, 5,217,179 shares of stock were issued to
the existing shareholders of the Company at no additional cost. The Company has
been advised that these unregistered distributions may be exempt from
registration and that the Company may have some contingent liability for the
distributions as a result. The Company received no funds as a result of the
distributions.

On April 18, 2002 the Company made effective the 4-for-5 reverse stock split and
allocated 27,335,584 restricted common shares for the acquisition of all
property, rights, privileges, leases of LTSI which became effective on August
15, 2002 and allocated 11,374,416 restricted common shares for funding the
merged entity. These restricted shares were issued in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act of 1933.

The facts relied on to make the exemption from registration provided by Section
4(2) of the Securities Act of 1933 available for the sale of securities
discussed in paragraphs 2 through 12 above were: (1) the limited number of
purchasers; (2) the sophistication or accreditation of the purchasers; (3) their
relationship with the Company and/or access to material information about the
Company; (4) the information furnished to them by the Company; (5) the absence
of any general solicitation or advertising; and (6) restrictions on transfer of
the securities issued to them as indicated by a legend on the certificates
representing such securities.

Item 6.  Plan of Operations

Disclosure Regarding Forward-Looking Statements

This Form 10-KSB includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act, and the Company desires to take advantage of
the "safe harbor" provisions thereof. Therefore, the Company is including this
statement for the express purpose of availing itself of the protections of such
safe harbor provisions with respect to all of such forward-looking statements.
The forward-looking statements in this Form 10-KSB reflect the Company's current
views with respect to future events and financial performance. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ from those anticipated. In the Form 10-KSB,
the words "anticipates," "believes, "expects," "intends," "future" and similar
expressions identify forward-looking statements. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that may arise after the date hereof. All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by this section.







                                      10

<PAGE>


General Discussion

Management views the decision, subsequent to September 30, 2001 fiscal year end,
to disburse certain assets to its subsidiaries and the merger/acquisition with
Local Telecom Systems, Inc. as a positive step toward building tangible value
for the Company's shareholders. This decision was made following several years
of searching and evaluating potential companies for merger or acquisition. The
primary focus of the Company was to seek a private company with an established
proven business record that had an upside potential. Management believes Local
Telecom Systems, Inc. meets these criteria.

Following fiscal year end, September 30, 1999, the Company initiated limited
sales of its unregistered common stock to raise working capital through the sale
of its common stock to primarily accredited investors. The Company sold
3,098,347 shares of common stock at $0.20 per share to accredited investors and
not more than 20 non-accredited investors for the fiscal year ended September
30, 2000. These proceeds were utilized to change the direction and streamline
the operations of the Company.

The Company divested all of its oil and gas working interest properties in 2000
that were previously written off as discontinued operations in 1999. The Company
acquired four small overriding royalty interests in oil & gas leases located in
Comanche County, Texas. Also in early 2000 the Company financed a portion of the
joint venture acquisition of a (approximately) 1,500-acre oil and gas lease in
Upton County, Texas. Also in 2000 the Company made the appropriate filings and
payments to maintain its patent rights to the IROC EOR process initially filed
in 1992. The IROC EOR process is reported with no value, having been written off
in the year ending September 30, 1996, but this process could be of significant
value in the future.

In 2000 the Company acquired the rights to a large seismic database primarily
covering a significant portion of the coastal area of Louisiana and Southeast
Texas with over 150,000 miles of seismic lines known as the "Coastal Seismic
Library Database of South Louisiana and Southeast Texas". The Company is
negotiating a potential sale of this database.

The Company entered into two financial transactions in 2000. It loaned $150,000
to Telkin Sheetmetal, Inc., secured by contract retainage and bearing 9% simple
interest. Telkin has made interest payments on this loan as agreed with a
maturity date of December 30, 2002. In March of 2000 the Company loaned to
BroadBand Wireless International Corporation $50,000 at 10% simple interest. The
Company was a stockholder of BroadBand at the time of the loan, and BroadBand
made partial interest payments on the loan. The Company is currently pursuing
collection of its loan to BroadBand. See Item 3, Legal Proceedings and Notes to
Financial Statements.

During 1999 through 2001 the Company organized four wholly owned subsidiaries,
International Royalty & Oil Co., Signature Financial Services, Inc., Signature
Healthcare, Inc. and Cumberland Continental Corp., in anticipation of pending
acquisitions and business diversification.

On August 24, 2001, Signature Healthcare, Inc. entered into an agreement with
National Healthcare, Inc. of New York, a custom medical and surgical packaging
company. The stipulated terms of the agreement were not met by December 31,
2001. However, subsequent to the end of the fiscal year end Signature
Healthcare, Inc. raised $100,000 through the placement of 200,000 shares of its
restricted common stock from an accredited investor. Signature Healthcare also
arranged working capital loans totaling approximately $150,000. As August 16,
2002 the asset acquisition of the medical packaging facility has not been
consummated. Negotiations are still in progress with the principles of
National Healthcare, Inc. and related entities to resolve these issues and
create an ongoing business.

Local Telecom Systems, Inc.

As a result of the Company's merger with LTSI, the Company business, as of
August 15, 2002, consists of providing local telephone service. LTSI and the
Company entered into a merger agreement where the Company would be the surviving
corporation with a name change to Local Telecom Systems, Inc. (LTSI).


                                      11
<PAGE>


LTSI has increased its cash requirements through the expansion of its services
in 42 additional states and District of Columbia. Marketing the Company's
prepaid local service will require the Company to utilize national advertising
to maximize the Company's exposure as it plans to increase its customer base
from 1,200 to over 9,000 within the next twelve months. A funding campaign to
raise approximately $2,000,000 in working capital is planned during the next
few months, through debt and/or equity financing. The Company's cash flow
projections indicate an initial funding of $2,000,000 in working capital would
be sufficient to carry the Company forward without additional funding other than
returning profits back into expanding the business.

During the second year of operations following the funding of $2,000,000 in
working capital, it is projected that the customer base could exceed 20,000.

Assets & Liabilities

The Company's current assets as of September 30, 1999, 2000 and 2001, were $122,
$177,056 and $161,389 respectively. This dramatic change in the increase in
current assets is directly related to the working capital raised through the
private placement of the Company's common stock in the fiscal year ended
September 30, 2000 and the Company's successful investments. Of the current
assets for both fiscal years 2000 and 2001, the $150,000 note receivable from
Telkin Sheetmetal is recorded.

The Company has Other Assets totaling $24,447, $265,275 and $240,275 for fiscal
years ended September 30, 1999, 2000 and 2001, respectively, consisting of
Discontinued Operations for 1999 and Seismic Library and Notes Receivable for
the years 2000 and 2001. The Coastal Seismic Library of South Louisiana and
Southeast Texas for $64,275 and the Notes Receivable of $201,000 consist of
$151,000 related to oil and gas leases in Upton County, Texas, and $50,000 to
BroadBand Wireless International Corporation.

Total Assets of the Company have also increased dramatically from $24,569 on
September 30, 1999, to $411,929 on September 30, 2000, and $409,567 on September
30, 2001. This large increase in total assets as reported in this section is
directly related to the private placement of its common stock to raise the
working capital to initiate operations.

The Company's liabilities on September 30, 1999, were $36,992 for accounts
payable and accrued liabilities that were primarily owed to the Company's
president for salaries and expenses. On September 30, 2000 and 2001, the Company
did not have any liabilities.

Liquidity and Capital Resources

The Company raised $583,984 in working capital during the fiscal years ended
September 30, 2000 and 2001 through the issuance of its common stock primarily
to accredited investors and less than 25 non-accredited investors. As of
September 30, 2001 the Company did not have any liabilities and had current
assets of $161,389. Prior to the acquisition of Local Telecom Systems, Inc. the
Company had sufficient cash and or revenues to carry on the Company's limited
operations.

As a result of the acquisition of Local Telecom Systems, Inc., the Company plans
to raise additional working capital from equity and/or debt financing. These
funds will be used to promote the Company's prepaid telephone services in the
new 42 licensed states plus District of Columbia acquired on August 15, 2002.

Income

The Company only had one income producing property on September 30, 2000, and
September 30, 2001, a small Canadian override which generated $489 for 2001 and
$573 for 2000. During the fiscal year ended September 30, 1999, the Company
reported all of its oil and gas operations as discontinued operations. As a
subsequent event the Company transferred all oil and gas related activities to a
wholly owned subsidiary, International Royalty & Oil Co.


                                      12
<PAGE>


The Company did report interest income from its loans to Telkin Sheetmetal and
loan to an individual for oil leases - reporting $20,105 for 2001, $12,801 for
2000, and no interest income was earned in 1999.

Expenditures

The Company's expenditures for the fiscal year ended September 30, 1999, were
$41,934 for General and Administrative Expenses. During the fiscal year ended
September 30, 2000, the Company incurred legal and accounting fees ($37,751) to
position the Company for a merger/acquisition. Each of the expenditure
categories declined in the fiscal year ended September 30, 2001, as fees
required to maintain the Company in an appropriate manner to seek a merger
and/or acquisition partner declined also. During fiscal year 2000, in order to
conserve working capital, the Company issued 478,000 common restricted shares in
lieu of cash for services. These shares were issued to directors, officers and
consultants based at a value of $92,844. During fiscal year 2000, in order to
conserve working capital, the Company issued 793,000 common restricted shares in
lieu of cash for services. These shares were issued to directors, officers and
consultants based at a value of $157,165. See Financial Statements and
Consolidated Statement of Changes in Stockholders' Equity.

Income Taxes

The Company anticipates that it will not generate taxable income sufficient to
utilize its carried forward tax losses at this time, based on historical
performance. See Note 5 to Financial Statements for additional disclosure.

Net Income (Loss)

The Company incurred a Net Loss of $45,129 for the year ended September 30,
1999, and a Net Loss of $218,166 and $202,297 for the years ended 2000 and 2001.
These losses are attributable to the amount of expenditures incurred seeking and
preparing the Company for a merger and/or acquisition partner. The net loss was
greater in the year ended September 30, 2000 as more compliance and consulting
work was performed during this period compared to the following year.

Item 7.  Financial Statements

The financial statement information for LTSI is set forth immediately following
the signature page of this Form 10KSB. See the Financial Statements attached
hereto beginning on page F-1.




                                      13
<PAGE>


CLYDE BAILEY P.C.
--------------------------------------------------------------------------------
                                                    Certified Public Accountants
                                                        10924 Vance Jackson #404
                                                        San Antonio, Texas 78230
                                                            (210) 699-1287(ofc.)
                                            (888) 699-1287  (210) 691-2911 (fax)

                                                                         Member:
                                                     American Institute of CPA's
                                                          Texas Society of CPA's

                   REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

To the Board of Directors and Shareholders
Signature Motorcars Inc.

We have audited the accompanying balance sheet of Signature Motorcars Inc.
("Company") as of September 30, 2001 and 2000 and the related statement of
operations, changes in stockholders' equity, and statement of cash flows for the
years ended September 30, 2001 and 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company and
subsidiaries as of September 30, 2001 and 2000, and the consolidated results of
their operations and their cash flows for the years ended September 30, 2001 and
2000 in conformity with accounting principles generally accepted in the United
States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has limited operations
currently and suffered recurring losses from operations that raise substantial
doubt about its ability to continue as a going concern. This is further
explained in the notes to financial statements.



/s/ Clyde Bailey
Clyde Bailey
Certified Public Accountant


April 10, 2002
San Antonio, Texas





                                      F-1

<PAGE>

                           Local Telecom Systems Inc.
                       (formerly Signature Motorcars Inc.)
                           Consolidated Balance Sheets
                        As of September 30, 2001 and 2000




                                   A S S E T S
                                   -----------
                                                       2001           2000
                                                   -------------  -------------
Current Assets:
    Cash and cash equivalent                        $      1,940   $     27,056
    Note Receivable                                      150,000        150,000
    Accrued Interest Receivable                            9,449              -
                                                   -------------  -------------
       Total Current Assets                              161,389        177,056

Investments, at Market Value                               2,904         13,248

Fixed Assets:
    Furniture and office equipment,                        7,361          9,464
       net of accumulated depreciation of
       $3,154 for 2001 and $1,052 for 2000
                                                   -------------  -------------
       Total Fixed Assets                                  7,361          9,464

Other Assets:
    Seismic Library                                       64,275         64,275
    Note Receivable                                      176,000        201,000
                                                   -------------  -------------
       Total Other Assets                                240,275        265,275

       Total Assets                                 $    411,929   $    465,043
                                                   =============  =============











     The accompanying notes are integral part of the financial statements.


                                       F-2

<PAGE>

                           Local Telecom Systems Inc.
                       (formerly Signature Motorcars Inc.)
                           Consolidated Balance Sheets
                        As of September 30, 2001 and 2000



        L I A B I L I T I E S and S T O C K H O L D E R S' E Q U I T Y
        --------------------------------------------------------------

                                                       2001           2000
                                                   -------------  -------------
Current Liabilities
    Accrued Expenses                                           -              -
                                                   -------------  -------------
       Total Current Liabilities                               -              -


Stockholders' Equity
    Preferred Stock, par value $.10 per share                  -              -
       authorized 1,000,000 shares, no shares outstanding
    Common Stock,                                        199,505        186,262
       par value $.0167 per share,
       authorized 100,000,000 shares;  11,126,182 and
       11,919,182 shares issued and outstanding
    Additional Paid-In Capital                         8,149,833      8,005,911
    Accumulated other comprehensive income               (11,934)        (1,590)
    Accumulated Deficit                               (7,925,475)    (7,723,178)
                                                   -------------  -------------
       Total Stockholders' Equity                        411,929        467,405

       Total Liabilities and Stockholders' Equity   $    411,929   $    467,405
                                                   =============  =============

















    The accompanying notes are integral part of the financial statements.


                                       F-3

<PAGE>

                           Local Telecom Systems Inc.
                       (formerly Signature Motorcars Inc.)
                     Consolidated Statement of Operations
            For the Years Ended September 30, 2001, 2000, and 1999





                                                         2001          2000
                                                      -----------   -----------

Revenues                                               $        -    $        -

Legal and Professional Fees                                 8,857        37,751
Depreciation                                                2,103         1,052
Consulting                                                157,165        92,844
Salaries, Wages, and Transfer Agent Fees                   39,916        62,750
Selling, general and administrative expenses               15,120        62,305
                                                      -----------   -----------
     Operating Income (Loss)                             (223,161)     (256,702)

Other Income (Expense):
    Interest (expense)                                          -        (5,400)
    Interest income                                        20,105        12,801
    Other Income (expense)                                    270        30,562
                                                      -----------   -----------
     Other Income, net                                     20,375        37,963
                                                      -----------   -----------
Loss from Continuing Operations                          (202,786)     (218,739)

Discontinued Operations                                       489           573
                                                      -----------   -----------
     Net Income (Loss)                                 $ (202,297)   $ (218,166)
                                                      ===========   ===========
     Net Income (Loss) per share                       $    (0.02)   $    (0.18)
                                                      ===========   ===========
     Weighted average shares outstanding               11,679,682     9,501,077
                                                      ===========   ===========











   The accompanying notes are integral part of the financial statements.


                                       F-4

<PAGE>

                                 Local Telecom Systems Inc.
                             (formerly Signature Motorcars Inc.)
                  Consolidated Statement of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
                                                                          Accumulated
                                                               Additional      other                         Total
                                            Common Stock         Paid-In    Comprehensive  Accumulated  Stockholders'
                                         Shares      Amount      Capital       Income        Deficit        Equity
                                        ---------   --------   ----------   -------------  -----------  -------------
           <S>                             <C>         <C>         <C>           <C>           <C>           <C>
Balance September 30, 1998              6,398,835    106,861    7,442,102        (69,260)  (7,459,883)       89,080

   Stock Issued for Accounts Payable      750,000      12,525      (5,025)                                    7,500

   Stock Issued for Services              261,000       4,813     (70,687)        69,260                      3,386

   Stock Issued for Cash                   40,000         668       1,332                                     2,000

   Net Loss                                                                                   (45,129)
                                        ---------    --------  ----------   -------------  -----------  -------------
Balance September 30, 1999              7,449,835     124,867   7,367,722              -   (7,505,012)      (12,423)

   Stock Issued for Cash                3,098,347      51,742     532,242                           -       583,984

   Stock issued for Assets                100,000       1,670      18,330                           -        20,000

   Stock Issued for Services              478,000       7,983      87,617                                    95,600

   Comprehensive (Loss):                                           (1,590)                     (1,590)
   Net Loss                                     -           -           -              -     (218,166)     (218,166)
                                        ---------    --------  ----------   -------------  -----------  -------------
Balance September 30, 2000             11,126,182     186,262   8,005,911         (1,590)  (7,723,178)      467,405

   Stock Issued for Services              793,000      13,243     143,922                                   157,165

   Comprehensive (Loss):                                          (10,344)       (10,344)
   Net Loss                                     -           -           -                    (202,297)     (202,297)
                                        ---------    --------  ----------   -------------  -----------  -------------
Balance September 30, 2001             11,919,182    $199,505  $8,149,833        (11,934) $(7,925,475)   $  411,929
                                        =========    ========  ==========   =============  ===========  =============

</TABLE>







          The accompanying notes are integral part of the financial statements.


                                       F-5

<PAGE>

                           Local Telecom Systems Inc.
                       (formerly Signature Motorcars Inc.)
                      Consolidated Statement of Cash Flows
             For the Years Ended September 30, 2001, 2000, and 1999
<TABLE>
<CAPTION>
                                                      2001         2000         1999
                                                  ------------ ------------ ------------
         <S>                                           <C>          <C>          <C>
Cash Flows from Operating Activities:

    Net Income (Loss)                             $  (202,297) $  (218,166) $   (45,129)

    Operating expenses not requiring use of cash:
       Depreciation expense                             2,103        1,052            -
       Stock Issued for Services                      157,165       92,844        3,386
       Accrued Expenses                                     -      (36,992)      39,692
       Accrued Interest Receivable                     (7,087)           -            -

    Net (increase) decrease in operating assets
       and liabilities                                152,181       56,904       43,078
                                                  ------------ ------------ ------------
Net Cash (Used in) Provided by Operating Activities   (50,116)    (161,262)      (2,051)

Cash Flows from Investing Activities:

    Advances of Notes Receivable                       25,000     (351,000)           -
    Seismic Library                                                (64,275)           -
    Sale of Marketable Securities                                    2,800            -
    Disposal of Discontinued Assets                                 24,447            -
    Purchase of property and equipment                     -       (10,516)           -
                                                  ------------ ------------ ------------
Net Cash Used in  Investing Activities                25,000      (398,544)           -

Cash Flows from Financing Activities:

    Common Stock                                           -       586,740        2,000
                                                  ------------ ------------ ------------
Net Cash Provided by Financing Activities                  -       586,740        2,000

Net Increase (Decrease) in Cash                      (25,116)       26,934          (51)

Cash -Beginning of year                               27,056           122          173
                                                  ------------ ------------ ------------
Cash -End of year                                 $    1,940   $    27,056  $       122
                                                  ============ ============ ============
Supplementary Disclosure:
       Cash Paid for Interest                              -         5,400            -
       Cash Paid for Taxes

Non-cash transactions:
       Shares Issued for Services                $   157,165  $     $2,844  $     3,386
       Shares Issued for Assets                            0  $     20,000  $         -
</TABLE>

       The accompanying notes are integral part of the financial statements.

                                       F-6
<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                             Description of Business

Local Telecom Systems Inc. (formerly Signature Motorcars, Inc.) (the "Company")
was incorporated in Nevada on February 19, 1969, as International Royalty &
Finance Co. Prior to the Company's public offering in 1972, the Company changed
its name to International Royalty & Oil Co. In April 1996, the Company's
controlling interest was acquired by ExotiCar Rentals, Inc. and the name was
changed to Signature Motorcars, Inc. On March 27, 2002, the Articles of Merger
was signed with Local Telecom Systems Inc., a Nevada company, and the Company.
As part of the merger agreement, the Company agreed to the name to be changer to
Local Telecom Systems, Inc.

During the year ended September 30, 1998, the Company began acquiring oil and
gas properties with the intention of developing the properties and becoming an
oil and gas producer. However, with the drop in oil prices during the period,
the Company has decided to discontinue those operations. Accordingly, the oil
and gas operations that was reported previously was disposed in 2000. The
Company has had nominal revenues from oil and gas activities that is shown as
income from discontinued operations.

The Company is currently considered a "public shell" corporation with nominal
business operations and is in the process of searching for an operating business
with which to negotiate a "reverse merger."

                              Basis of Presentation

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

The Company has suffered continuing net losses from operations that raise
substantial doubt about its ability to continue as a going concern. As explained
above, without a merger partner, the Company has nominal operations. The Company
is dependant on a merger partner or raising additional funds in order to provide
capital for the Company to continue as a going concern.

                           Principles of Consolidation

The Company has four wholly owned subsidiaries that are inactive as of September
30, 2001. The Company plans merger activities with these subsidiary's in the
coming year. There has been no operations in these subsidiaries to date. A brief
description of the subsidiaries are as follows:

On July 22, 1999 the Company formed International Royalty & Oil Co. for the
purpose of engaging in oil and gas operations.  The president of this entity is
William R. Miertschin.  Mr. Miertschin also serves as president, CEO and
director of the Company, Signature Motorcars, Inc. however the Company does not
anticipate any conflicts of interest with him holding these corporate positions
in these two companies as well as the other sister companies also mentioned in
this section.



                                       F-7

<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

On July 29, 2000 the Company formed Signature Financial Services, Inc. for the
purpose of engaging in financial matters and to assist in funding its sister
companies projects. The president of Signature Financial Services, Inc. is
William R. Miertschin.  Mr. Miertschin also serves as president, CEO and
director of the Company, Signature Motorcars, Inc. however the Company does not
anticipate any conflicts of interest with him holding these corporate positions
in these two companies as well as the other sister companies also mentioned in
this section.

On June 22, 2001 the Company formed Cumberland Continental Corp. in anticipation
of a potential merger which has not been consummated at this time.
The president of this newly formed entity is William R. Miertschin.  Mr.
Miertschin also serves as president, CEO and director of the Company, Signature
Motorcars, Inc. however the Company does not anticipate any conflicts of
interest with him holding these corporate positions in these two companies as
well as the other sister companies also mentioned in this section.

On September 19, 2001 the Company formed Signature HealthCare, Inc. for the
purpose of packaging healthcare single ready to use package for the
ophthalmology health field. The president of this newly formed entity is William
R. Miertschin.  Mr. Miertschin also serves as president, CEO and director of the
Company, Signature Motorcars, Inc. however the Company does not anticipate any
conflicts of interest with him holding these corporate positions in these two
companies as well as the other sister companies also mentioned in this section.

                        Use of Estimates and Assumptions

Preparation of the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

                            Net Loss Per Common Share

In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS
128 provides a different method of calculating earnings per share than was
formerly used in APB Opinion 15. SFAS 128 provides for the calculation of basic
and diluted earnings per share. Basic earnings per share includes no dilution
and is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding for the period. Dilutive
earnings per share reflects the potential dilution of securities that could
share in the earnings of the Company. The Company was required to adopt this
standard in the fourth quarter of calendar 1997. Because the Company has no
potential dilutive securities, the accompanying presentation is only of basic
loss per share.

                             Statement of Cash Flows

For statement of cash flow purposes, the Company considers short-term
investments with original maturities of three months or less to be cash
equivalents.




                                       F-8

<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

                                  Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS
109 utilizes the asset and liability method of computing deferred income taxes.
The objective of the asset and liability method is to establish deferred tax
assets and liabilities for the temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities at
enacted tax rates expected to be in effect when such amounts are realized or
settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

                             Property and Equipment

Property and equipment is stated at cost. Depreciation is expensed using
straight-line and accelerated methods over the estimated useful lives of the
assets. The estimated useful lives are: building-30 to 40 years; equipment and
tools-5 to 7 years; software-5 years; furniture and fixtures-5 to 7 years.
Depreciation expense in the amount of $2,103 and $1,052 has been recognized for
the years ended September 30, 2001 and 2000 respectively.

                         Impairment of Long-Lived Assets

The Company follows SFAS No. 121, "Accounting for Impairment of Long-Lived
Assets and for Long- Lived Assets to be Disposed Of". The Statement requires
that long-lived assets and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events of changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.

Recent Accounting Pronouncements

Segments of an Enterprise and Related Information

Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.

Goodwill and Other Intangible Assets

In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Standards ("SFAS") No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets". SFAS No. 141 established accounting and
reporting standards for business combinations and eliminates the pooling-of-
interests method of accounting for combinations for those combinations initiated
after July 1, 2001. SFAS No, 141 also includes new criteria to recognize
intangible assets separately from goodwill.


                                       F-9
<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

SFAS No. 142 establishes the accounting and reporting standards from goodwill
and intangible lives. Goodwill and intangibles with indefinite lives will no
longer be amortized, but, alternatively will be reviewed periodically for
indicators of impairment. Separate intangible assets that are not deemed to have
an indefinite life will continue to be amortized over their useful lives. The
Company does not anticipate that the adoption of SFAS No. 141 and SFAS No. 142
will have a significant effect on its results of operations or financial
position.

2. COMMON STOCK

The Company has 100,000,000 common shares authorized with a par value of $0.0167
of which 11,919,182 are issued and outstanding as of September 30, 2001. The
Company also has 1,000,000 preferred shares authorized with a par value of $0.10
of which no shares are issued and outstanding.

As of September 30, 2001 the Company had 850,000 warrants outstanding to
purchase 850,000 restricted common shares at an exercise price of $0.20 per
share. Subsequent to the end of the fiscal year ended September 30, 2001 650,000
warrants were exercised causing the issuance of 650,000 restricted common
shares. The remaining 200,000 warrants have an expiration date of January 20,
2003.

During the year ended September 30, 2000, the Company issued securities in the
transactions below without registering the securities under the Securities Act
of 1933. No underwriter, sales or placement agent was involved in any of the
transactions.

On December 7, 1999 the Company issued 478,000 restricted common shares. Of
these shares 378,000 were issued to its officers and directors for services and
100,000 was issued to a consultant for services regarding an oil and gas leases
in Upton County, Texas.

On December 20, 1999 the Company issued 550,000 (at $0.20 per share) restricted
common shares with warrants attached to purchase an additional 850,000
restricted common shares with an exercisable price of $0.20 per share to expire
in January 2003. The Company received from this private placement of its common
stock $90,000 in cash plus 100,000 shares of tradable shares in another public
company valued at $20,000.

On February 1, 2000 the Company issued 667,844 (at $0.20 per share) restricted
common shares for $100,175 in cash and $33,399 for overrides under four oil and
gas leases located in Comanche County, Texas.

On February 29, 2000 the Company issued 1,335,500 (at $0.20 per share)
restricted common shares for $267,100. On April 21, 2000 the Company issued
645,000 (at $0.20 per share) restricted common shares for $129,000.

On December 7, 2000 the Company issued 628,000 restricted common shares. Of
these shares 378,000 were issued to its officers and directors for services and
250,000 was issued to consultants for an oil and gas project in South Texas and
for fees associated with the acquisition of the Coastal Seismic Library Database
of South Louisiana and Southeast Texas.


                                       F-10

<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

During the year ended September 30, 2001, the Company issued securities in the
transactions below without registering the securities under the Securities Act
of 1933. No underwriter, sales or placement agent was involved in any of the
transactions.

On April 2, 2001 the Company issued 165,000 restricted common shares for
consideration to extend a note for the Troell oil and gas lease located in south
Texas. Of the 165,000 shares issued for this extension 15,000 were issued for
professional fees to prepare the legal documentation for the extension.

3. RELATED PARTY TRANSACTIONS

The Company has significant relation with the President and principal
shareholder, William R. Miertschin in the form of salary and expenses.

4. INCOME TAXES

At September 30, 2001, the Company had net operating loss carryforwards totaling
approximately $7,600,000 available to reduce future taxable income through the
year 2021. Due to changes in control of the Company, these carryforwards are
limited on an annual basis.

5. NOTES RECEIVABLE

The Company holds three notes receivable for funds advanced. They consist of the
following:

Notes Receivable dated December 30, 2000 in the amount of $150,000 due December
30, 2002 from Telkin Sheetmetal Inc. The note carries an interest rate of 9% and
calls for interest to be paid quarterly. The note is current as of September 30,
2001.

Note Receivable dated March 31, 2000 in the amount of $50,000 that was due on
demand from Broadband Wireless International Corporation (Broadband). The note
carries an interest rate of 10% and calls for interest to be paid quarterly.
Although Broadband is in Chapter 11 Bankruptcy, the Company and their counsel
believes the note is collectable from the note holder.

Note Receivable dated February 3, 2000 in the amount of $126,000 that is due
February 3, 2003 from Bryan Gossett. The note carries and interest rate of 10%
and calls for interest to be paid at maturity. The Company had loaned Mr.
Gossett the funds to purchase some oil leases and believes the note is fully
collectable.

6. COMMITMENTS AND CONTINGENCIES

                          Concentration of Credit Risk

The Company invests its cash and certificates of deposit primarily in deposits
with major banks. The Company has not incurred losses related to its cash.




                                      F-11
<PAGE>

                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

                       Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, Disclosures about Fair
Value of Financial Instruments. The estimated fair value amounts have been
determined by the Company, using available market information and appropriate
valuation methodologies.

The fair value of financial instruments classified as current assets or
liabilities including cash and cash equivalents and accounts payable approximate
carrying value due to the short-term maturity of the instruments.

7. SUBSEQUENT EVENTS

During the spring of 2001 management of the Company began meeting with Local
Telecom Systems, Inc. (Local Telecom) and initiated its due diligence process.
During this due diligence process Local Telecom was seeking to acquire licenses
for additional states for expanding their service area. A meeting was held on
February 22, 2002 by a majority of the shareholders of the Company to approve
the merger of Local Telecom. Of the 15,000,000 shares currently outstanding,
7,829,179 were present at the meeting, representing a quorum. The terms of the
merger approved at the meeting were:

            1.    Signature Motorcars, Inc. shall be the surviving corporation.
            2.    All the property, rights, privileges, leases, of Local Telecom
                  Systems, Inc. will be transferred to Signature Motorcars,
                  Inc., the survivor for 38,710,000 shares of Signature's common
                  stock.
            3.    The name was to change to Local Telecom Systems, Inc.
            4.    A four for five share reverse stock split lowering the number
                  of shares from 15,000,000 to 12,000,000 shares outstanding.
            5.    Effective date to be April 18, 2002.

Local Telecom Systems, Inc. (LTSI) is a local telephone service reseller with a
three year old customer base in Texas, New Mexico and Arizona. LTSI recently
acquired the necessary licenses and interconnect agreements to offer, on a
national basis, prepaid local telephone service and various ancillary products
such as 911, caller ID and prepaid long distance in 45 states.

Subsequent to September 30, 2001, the Company had a 4 for 5 reverse stock split
with an effective date of April 18, 2002. Followed by a merger which requires
the issuance of 38,710,000 restricted common shares.

Also subsequent to the year ended September 30, 2001, the Company issued
securities in the transactions below without registering the securities under
the Securities Act of 1933. No underwriter, sales or placement agent was
involved in any of the transactions.

On October 25, 2001 the Company issued 133,000 restricted common shares for cash
and services. The Company sold 25,000 restricted common shares for $5,000 and
issued 108,000 restricted common shares for services. The placement of 25,000
shares was to an existing shareholder that had previously purchased restricted
stock from the Company.


                                      F-12

<PAGE>
                           LOCAL TELECOM SYSTEM, INC.
                       (FORMERLY SIGNATURE MOTORCARS INC.)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

On December 7, 2001 the Company issued 228,000 restricted common shares to its
officers and directors.

On March 19, 2002 the Company issued 350,000 restricted common shares when
350,000 warrants were exercised. These warrants were issued in conjunction with
the private placement of stock made on December 20, 1999, stated above. The
exercise price was $0.20 per share and resulted in cash to the Company of
$70,000.

On April 1, 2002 the Company issued 300,000 restricted common shares when
300,000 warrants were exercised. These warrants were issued in conjunction with
the private placement of stock made on December 20, 1999, stated above. The
exercise price was $0.20 per share and resulted in cash to the Company of
$60,000.

On February 15, 2002 the Company issued 2,719,818 restricted common shares for
consulting services for the acquisition and for providing funding arrangements
for the merger with Local Telecom Services, Inc. These consulting services
received only restricted shares for compensation.








                                      F-13

<PAGE>


Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

There are no disagreements between the Company and its auditor, Clyde Bailey,
P.C., San Antonio, Texas, regarding accounting and/or financial disclosure. On
May 24, 2001 the Company filed a Form 8-K and an amended Form 8-KA filed on June
6, 2002 reporting the change in accountants from Jackson & Rhodes P.C. of
Dallas, Texas to Clyde Bailey, P.C.

Jackson & Rhodes' reports on the Registrant's financial statements for the years
ended September 30, 1998 and September 30, 1999 contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles except that Jackson & Rhodes' report
included a paragraph that described conditions that raised substantial doubt
about the Registrant's ability to continue as a going concern.

There have been no disagreements with Jackson & Rhodes on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure during the Registrant's most recent fiscal year or in the
subsequent interim period through May 24, 2002 (the date of termination) which
disagreement(s), if not resolved to Jackson & Rhodes' satisfaction, would have
caused Jackson & Rhodes to make reference to the subject matter of the
disagreement(s) in connection with its report.

                                   PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons

The following are the officers and directors of the Company as of August 16,
2002:

                                    Date First
      Name                    Age   Elected     Term        Position
      -------------------------------------------------------------------------
      William R. Miertschin   54    1997        1 year      President, CEO &
                                                            Director
      Tracey Norris           32    2002        1 year      Secretary &
                                                            Director
      Amber G. Smith          38    2002        1 year      Treasurer

      Richard M. Hewitt       64    2002        1 year      Director

William R. Miertschin, President, Chief Executive Officer, and Chairman of the
Board of Directors, is an oil and gas consultant with offices in Dallas, Texas.
A 1972 graduate of the University of Texas at Austin, with a BA in Mathematics,
he completed additional courses in petroleum engineering at the University of
Texas of the Permian Basin in 1978. Beginning his oil and gas career in 1975,
Miertschin served as an Engineer with the Baroid Division of NL Industries in
Odessa, Texas. From 1977 to 1979, Mr. Miertschin was Drilling Supervisor for
Gulf Oil Exploration and Production, being the first trainee to complete Gulf
Oil's drilling and production engineering training program. Thereafter, he was
employed with Mesa Petroleum (1979-1985) as Corporate Supervisor of Regulatory
and Safety in Amarillo, Texas, and as Drilling Supervisor and Senior Drilling
Engineer in Midland and Amarillo, Texas, managing Mesa's corporate drilling and
completion operations for all of the Permian Basin Division, Texas Panhandle and
Kansas. In 1986 he graduated from the Leadership Amarillo Program of the
Amarillo Chamber of Commerce. A former member of the Society of Petroleum
Engineers, Mr. Miertschin has served as an expert witness before the Kansas
Corporation Commission (KCC) and the New Mexico Oil Conservation Commission
(NMOCC) on regulatory affairs, drilling and completion, and analysis of
potential production purchases. He also served on the Oil and Gas Advisory
Committee to KCC to revise statewide rules in Kansas. Mr. Miertschin has been
active in the oil and gas industry as an investor and operator, and has been in
private practice as a consultant in the Dallas-Fort Worth area for the last
fourteen (14) years. Since 1997, Mr. Miertschin has served as


                                      14
<PAGE>


President, Chief Executive Officer and Chairman of the Board of Directors of the
Company and its subsidiaries. During this period he maintained, funded and
expanded the operations of the Company. He has agreed to continue with Local
Telecom Systems, Inc. in those same capacities to facilitate the transition and
reverse merger. Also, he is currently a Vice-President of the Dallas Safari
Club.

Tracey Norris, Secretary, Director of Operations, and a Director of the Company
since February 2002. Previously she served as Office Manager and Director of
Operations of Local Telecom Service, LLC (a prepaid telephone resale company)
since 1998. Before joining Local Telecom Service, LLC, Ms. Norris worked for
Southwestern Bell in the Department of Resale Specialization. Between 1996 and
1998 Ms. Norris was trained in local resale telephone service including, but not
limited to, order processing, order completion, and billing. Prior to 1996 Ms.
Norris was Manager of Accounting for Twenty-First Century Connection and
Research and Processing Department at Vought Heritage Federal Credit Union,
Grand Prairie. Ms. Norris attended University of Texas at Arlington, majoring in
accounting.

Amber G. Smith, Treasurer of the Company since February 2002. A native of
Friona, Texas, Ms. Smith is a 1986 graduate of West Texas State University,
Canyon, Texas. Ms. Smith worked as Telecommunications Manager of Span
Instruments, Inc., Plano, Texas from 1991 until 1996.  Since 1996 she has been
active in managing her personal investment portfolio and performing consulting
services for both public and private companies. In 1989 and 1990 she was
Communications Manager of H.D. Vest Financial Services, Inc., Irving, Texas, a
securities broker dealer.

Richard M. Hewitt, Director of the Company since February 2002. He is a sole
practitioner attorney specializing in securities law. A 1958 graduate of
Grinnell College, Grinnell, Iowa, with an AB degree, Mr. Hewitt holds an LLB
degree from Southern Methodist University, College of Law in Dallas, Texas
(1963). He has been in private practice in the Dallas-Fort Worth area for the
last 20 years. Mr. Hewitt is currently Vice President and a Director of Gas
Transmission Organization, Inc. Dallas, Texas, and Director of Golden Chief
Resources, Inc. Dallas, Texas, a publicly owned independent oil and gas
producer.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on a review of reports filed with the Company, several persons
(William Miertschin, Howard Siegel, Victoria Lucas and Elizabeth Webb) did not
file all reports on time regarding transactions in the Company's securities
required to be filed for 2001 by Section 16(a) under the Securities Exchange Act
of 1934. Though the required reports were not filed timely, they were
subsequently filed after the year end.

Item 10.  Executive Compensation

The Company's total remuneration for annual salary and bonuses does not exceed
$100,000 per officer. The Company currently does not have a compensation
committee, however, since the merger with Local Telecom Systems, Inc. a
compensation committee will be formed to evaluate the annual remuneration for
each of its officers. The annual compensation for the president and CEO of the
Company, William Miertschin, was $36,000 per year for the fiscal years ended
September 30, 1999, 2000 and 2001. Mr. Miertschin also received a total of
108,000 shares of restricted common shares for serving as a director
representing 36,000 shares per year.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following is certain information concerning persons or firms who are known
by the Company to own beneficially more than 5% of the Company's common stock
(39,330,582 shares) and voting shares on August 16, 2002:



                                      15

<PAGE>


                        Name and Address        Number of         Percent
      Title of Class    of Beneficial Owner     Shares Owned      of Class
      ------------------------------------------------------------------------
      Common Stock      Connect Holding Corp.      12,580,000       31.985
      $0.0167 Par Value 1133 Empire Drive
                        Dallas, Texas 75247

      Common Stock      Sammy Dog, Ltd.            12,580,000       31.985
      $0.0167 Par Value 400 North Bailey Ave.
                        Fort Worth, Texas 76107
      ------------------------------------------------------------------------
       Executive Officers and Directors
      ------------------------------------------------------------------------

      Common Stock      William R. Miertschin       4,049,163       10.295
      $0.0167 Par Value 7738 Forest Lane #102
                        Dallas, Texas 75230

      Common Stock      Tracey Norris                  50,000        0.127
      $0.0167 Par Value 2034 Misty Glen, #1910
                        Arlington, Texas 76011

      Common Stock      Amber G. Smith                 52,800        0.134
      $0.0167 Par Value 6867 Anglebluff Circle
                        Dallas, Texas 75248

      Common Stock      Richard M. Hewitt           1,317,855*       3.351
      $0.0167 Par Value 202 Fresh Meadow Drive
                        Trophy Club, Texas 76262
      ------------------------------------------------------------------------
      All Directors and Officers as a group
        (4 persons)                                 5,469,818        13.907
      ------------------------------------------------------------------------

*Of the 1,317,585 shares held by Richard M. Hewitt, 700,000 shares are held
directly and 617,855 shares are held indirectly through his ownership in Graford
Communications Group and Copano Bay Associates, both are Texas general
partnerships.

On April 18, 2002 the Company implemented a 4 for 5 reverse stock split. The
above share numbers are share positions as of August 16, 2002 and do reflect the
reduction in the number of shares caused by the reverse stock split.

Changes in Control of Issuer

As of fiscal year end, September 30, 2001, there had been no changes in control
of the Company. However, as a subsequent event, a merger/acquisition with Local
Telecom Systems, Inc. and related transactions thereto resulted in a change of
control and change of name of the Company. See "Subsequent Events" in Item 1,
and Item 4 "Submission of Matters to a Vote of Security Holders".

Item 12. Certain Relationships and Related Transactions

On July 22, 1999 the Company formed International Royalty & Oil Co. for the
purpose of engaging in oil and gas operations.  The president of this entity is
William R. Miertschin.



                                      16

<PAGE>


On July 29, 2000 the Company formed Signature Financial Services, Inc. for the
purpose of engaging in financial matters and to assist in funding its sister
companies' projects. The president of Signature Financial Services, Inc. is
William R. Miertschin.

On June 22, 2001 the Company formed Cumberland Continental Corp. The president
of this newly formed entity is William R. Miertschin.

On September 19, 2001 the Company formed Signature Healthcare, Inc. for the
purpose of packaging healthcare single ready to use package for the
ophthalmology health field. The president of this newly formed entity is William
R. Miertschin.

Mr. Miertschin also serves as president, CEO and director of the Company, Local
Telecom Systems, Inc. However, the Company does not anticipate any conflicts of
interest with him holding these corporate positions in these companies mentioned
in this section.

Mr. Hewitt, a director of the Company, is also a partner in both Graford
Communications Group and Copano Bay Associates which are shareholders of the
Company. Graford Communications Group owns 1,600,000 shares and Copano Bay
Associates owns 575,855 shares. Neither Graford Communications Group or Copano
Bay Associates are in competition with the Company in its prepaid telephone
business.

Item 13.  Exhibits and Reports on Form 8-K

(a)   No reports were filed on Form 8-K during the past year ended September 30,
      2001. However, on May 24, 2001 the Company filed a Form 8-K and on June 6,
      2002 filed an amendment Form 8-KA notifying the change of accountants from
      Jackson & Rhodes, P.C. of Dallas, Texas to Clyde Bailey, P.C. of San
      Antonio, Texas.

(b)   The Index to Exhibits is found on page 19.

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, Local Telecom Systems, Inc., has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                          LOCAL TELECOM SYSTEMS, INC.

Date: September 5, 2002                   /s/ William R. Miertschin
                                          ------------------------------------
                                          By: William R. Miertschin, President,
                                              Chief Executive Officer, Principal
                                              Accounting Officer, Principal
                                              Financial Officer








                                      17

<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:


    Signature                 Title                   Date


/s/ Tracey Norris             Secretary & Director    September 5, 2002
-------------------------
Tracey Norris


/s/ William R. Miertschin     President & Director    September 5, 2002
-------------------------
William R. Miertschin


/s/ Richard M. Hewitt         Director                September 5, 2002
-------------------------
Richard M. Hewitt









                                      18

<PAGE>

                              INDEX TO EXHIBITS


Exhibit No.      Page No.    Description
-----------      --------    -----------

   2(i)             20       A February 22, 2002 Merger Agreement by and between
                             the Company and Local Telecom Systems, Inc.
   2(ii)            28       Articles of Merger by and between Local Telecom
                             Systems, Inc. and Signature Motorcars, Inc.
   10(i)            31       An August 15, 2002 Master Stock Purchase Agreement
                             regarding the Company's purchase of license
                             agreements in 42 states and the District of
                             Columbia
   10(ii)           34       An August 15, 2002 Asset Purchase Agreement by and
                             between Local Telecom Systems, Inc. and CCCLA, Inc.
   10(iii)          41       An August 15, 2002 Asset Purchase Agreement by and
                             between Local Telecom Systems, Inc. and CCCPA, Inc.
   10(iv)           48       A December 30, 2002 Promissory Note by Telkin
                             Sheetmetal, Inc. payable to the Company in the
                             amount of $150,000.00
   10(v)            53       A March 27, 2000 Promissory Note by BroadBand
                             Wireless International Corporation payable to the
                             Company in the amount of $50,000.00
   10(vi)           55       A February 3, 2000 Promissory Note by Bryan Gossett
                             payable to the Company in the amount of $150,000.00
   10(vii)          57       Spin off Documents - Minutes of Special Meeting of
                             the Shareholders of Signature Motorcars, Inc. on
                             February 22, 2002
   21               61       List of Subsidiaries






                                      19

<PAGE>

                                                                  Exhibit 2(i)

                           ASSET PURCHASE AGREEMENT


THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into effective as of
August 15, 2002 by and among LOCAL TELECOM SERVICE, LLC., a Texas limited
liability company ("Seller"), on the one hand, and LOCAL TELECOM SYSTEMS, INC.,
a Nevada corporation.

                                   RECITALS

A.    Seller is engaged in the telecommunications business in Texas, New Mexico,
Arizona, Mississippi and North Carolina (the "Business").

B.    Buyer desires to purchase, and Seller desires to sell to Buyer, all upon
the terms and conditions hereinafter set forth, certain of the assets of Seller.

      NOW, THEREFORE, the parties agree as follows:

                                  ARTICLE 1
                  SALE OF ASSETS; ASSUMPTION OF LIABILITIES

            1.1 Sale of Assets. On the terms and subject to the conditions in
this Agreement, Seller agrees to sell, convey, transfer, assign and deliver the
following to Buyer at the Closing (as hereinafter defined) all of the assets of
the Seller including but not limited to (a) Local CPCN licenses, as listed on
Exhibit A, (b) an existing customer base of 1,000 to 1,500 customers and (c)
certain unencumbered equipment. ("Subject Assets").

            1.2 Method of Conveyance and Transfer. Seller agrees that the
conveyance, transfer and delivery of the Subject Assets will be effected at the
Closing by Seller executing and delivering to Buyer appropriate bills of sale,
endorsements, transfers, and other instruments of transfer. Seller shall deliver
physical possession and control of the Subject Assets to Buyer at the Closing.

            1.3 Further Assurances. Seller, at any time and from time to time
after the Closing, upon request of Buyer, will do, execute, acknowledge and
deliver, all such further acts, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably required for the better conveying,
transferring, assigning, and delivering to Buyer, or to its successors and
assigns, and for aiding and assisting in collecting and reducing to possession,
all the Subject Assets.

                                  ARTICLE 2
                    PURCHASE PRICE; ALLOCATION OF CERTAIN
                  PRECLOSING RECEIPTS AND EXPENSES, PAYMENT

            2.1 Amount of Purchase Price. The entire consideration (the
"Purchase Price") for the sale, transfer and assignment by Seller to Buyer of
the Subject Assets and for the representations, warranties and covenants of
Seller set forth herein, shall be 12,580,000 shares of Buyer's common stock and
cash of $100,000.

                                      20

<PAGE>

            2.2 Payment at Closing. At the Closing, Buyer shall pay to Seller
the amount owed pursuant to Section 2.1 in the form of 12,580,000 shares of
Buyers common stock. Within 60 days after closing, Seller shall pay Buyer
$100,000.

                                  ARTICLE 3
                       REPRESENTATIONS, WARRANTIES AND
                     AGREEMENTS OF SELLER AND STOCKHOLDER

Seller represents and warrants to, and agrees with, Buyer as of the date hereof
and as of the Closing Date as follows:

            3.1 Organization and Standing. Seller is a limited liability
company duly organized, under the laws of the State of Texas. Seller has full
power and authority to carry on the Business as and where conducted and to own
and operate the Subject Assets at and where owned or leased and operated by it.

            3.2 Authority of Seller Consents. The execution, delivery and
consummation of this Agreement by Seller has been duly authorized in accordance
with all applicable laws and the Articles of Incorporation and By-Laws of
Seller, no further corporate action is necessary on the part of Seller or the
Board of Directors of Seller for the execution, delivery and consummation of
this Agreement by Seller and this Agreement constitutes the legal, valid and
binding obligation of Seller enforceable against it in accordance with its
terms.

            3.3 Title to Assets: Condition of Assets. Seller owns and possesses,
and will own and possess as of the Closing Date, all right, title and interest
in and to the Subject Assets. Seller has and will have as of the Closing Date
the right, power and capacity to sell, convey, transfer, assign and deliver to
Buyer the Subject Assets. All of the Subject Assets are in Seller's possession
and under its control. All of the Subject Assets are in good operating condition
and repair and are fit for the purposes for which they are used.

            3.4 Licenses and Rights. Seller possesses all franchises, licenses,
easements, permits and other authorizations from governmental or regulatory
authorities (either domestic or foreign) and from all other persons or entities
that are necessary to permit it to engage in the Business as presently conducted
in and at all locations and placed where it is presently operating.

            3.5 Articles of Incorporation and By-Laws. True, accurate and
complete copies of the Articles of Incorporation and By-Laws or similar charter
documents of Seller, together with all amendments thereto, have been delivered
to Buyer.

            3.6 Material Misstatements or Omissions. No representations or
warranties made by Seller in this Agreement furnished or to be furnished to
Buyer in connection with the transactions governed by this Agreement, contain
any untrue statement of a material fact, or omit to state a material fact
necessary to make the statements of fact contained therein, in light of the
circumstances under which they were made, not misleading.




                                      21

<PAGE>

                                  ARTICLE 4
                   REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer warrants and represents to, and agrees with, Seller as follows:

            4.1 Organization and Good Standing of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, has full power and authority to carry on its business as and
where now conducted.

            4.2 Authority of Buyer. The execution, delivery and consummation of
this Agreement by Buyer has been authorized by the board of directors of Buyer
in accordance with all applicable laws and the Articles of Incorporation and
Bylaws of Buyer, and at the Closing Date no further corporate action will be
necessary on the part of Buyer to make this Agreement valid and binding on Buyer
and enforceable against Buyer in accordance with its terms.

            4.3 Execution, Delivery and Binding Effect. 'This Agreement has been
duly executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.

                                  ARTICLE 5
                               OTHER COVENANTS

            5.1 Conduct of Business. From and after the date of this Agreement
and through the Closing, Seller agrees that Seller will conduct the Business
only in the usual, regular and ordinary course of business. Without limiting the
generality of the foregoing, Seller shall not do or permit any of the following
without the prior written consent of Buyer:

                  (a)   any sale or transfer of any assets, or settlement,
cancellation or release of any indebtedness owing to Seller or of any other
claims of Seller;

                  (b) any amendment or termination of any contract, agreement or
license, to which Seller is a party or to which Seller or any of the assets of
Seller are subject or bound;

                  (c)   any loss, damage or destruction to the Subject Assets
(whether or not covered by insurance);

                  (d)   any transaction outside of the ordinary course of
business; or

                  (e)   Any agreement or commitment to do any of the foregoing.

            5.2 Confidentiality. Seller agrees to keep any information that it
receives from or relating to Buyer confidential and not to disclose such
information to third parties other than accountants, lawyers, bankers and
financial advisers necessary to complete the transactions contemplated by this
Agreement.

            5.3 Notice and Cure. Seller agrees to notify Buyer promptly in
writing of, and contemporaneously will provide Buyer with true and complete
copies of any and all information or documents relating to, and will use their
best efforts to cure before the Closing, any event, transaction or circumstance
occurring after the date of this Agreement that causes or will cause any

                                      22

<PAGE>



covenant or agreement of Seller in this Agreement to be breached or that renders
or will render untrue any representation or warranty of Seller in this
Agreement. Seller also will notify Buyer promptly in writing of, and will use
their best efforts to cure, before the Closing, any violation or breach of any
representation, warranty, covenant or agreement made by Seller in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement.

                                  ARTICLE 6
                 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligations of Buyer under this Agreement are, at its option, subject to
satisfaction of the following conditions at or prior to the Closing:

            6.1 The warranties and representations made herein by Seller to
Buyer shall be true and correct as of the Closing with the same effect as if
such warranties and representations had been made as of the Closing, and Seller
shall have performed and complied with all agreements and covenants contained
herein on its part required to be performed or complied with on or prior to the
Closing.

            6.2 Buyer shall have received such approvals, consents,
authorizations, waivers and permits from any person, necessary or appropriate in
order to enable Buyer to acquire the Subject Assets in the manner provided
herein without the imposition of any conditions which Buyer might reasonably
consider to be significant or adverse.

            6.3 All proceedings to be taken in connection with the consummation
of the transactions contemplated by this Agreement, and all certificates,
documents and instruments incidental thereto, shall be reasonably satisfactory
in form and substance to Buyer and its counsel and Buyer shall have received
copies of such documents and instruments as Buyer and its counsel may reasonably
request in connection with such transactions.

            6.4 Buyer shall have completed it due diligence investigation of
Seller and the results thereof shall be satisfactory to Buyer in its sole
discretion.

            6.5   Receipt of Documents by Buyer.  Seller shall have delivered to
Buyer:

                  (a) certified copies of resolutions duly adopted by the board
of directors of Seller approving this Agreement and the transactions
contemplated under it;

                  (b) Buyer shall have received from Seller a certificate dated
the Closing Date certifying that the conditions set forth in Sections 6.2
through 6.4 have been fulfilled.

            6.6 Instruments of Transfer and Delivery of the Subject Assets.
Seller shall have delivered to Buyer good and sufficient instruments of transfer
relating to the Subject Assets as required pursuant to Section 1.3. The
instruments of transfer shall be in form and substance reasonably satisfactory
to Buyer.





                                      23

<PAGE>

                                  ARTICLE 7
                                   CLOSING

The closing of the transactions contemplated by this Agreement (the "Closing")
will take place at the offices of Local Telecom Systems, Inc., 3535 West Seventh
Street, Suite 5, Fort Worth, Texas 76107 at 3:00 p.m. on or about August 15,
2002 or such other time and date mutually agreeable to the parties (the "Closing
Date").

                                  ARTICLE 8
                         SURVIVAL OF REPRESENTATIONS
                                AND WARRANTIES

            8.1 Survival of Representations and Warranties. Notwithstanding the
Closing of the transactions contemplated under this Agreement, or any
investigation made by or on behalf of Buyer or Seller, the representations and
warranties of Buyer and Seller contained in this Agreement or in any
certificate, schedule, chart, list, letter, compilation or other document
furnished pursuant to this Agreement, will survive the Closing.

                                  ARTICLE 9
                ASSIGNMENT, THIRD PARTIES, AND BINDING EFFECT

The rights of Seller under this Agreement are personal and are not assignable
nor are their duties delegable without the prior written consent of Buyer, and
any attempted assignment or delegation without such written consent will be null
and void. This Agreement and the rights and duties of Buyer hereunder are freely
assignable and delegable without the consent of Seller. Nothing contained in
this Agreement is intended to convey upon any person or entity, other than the
parties and their successors in interest and permitted assigns, any rights or
remedies under or by reason of this Agreement. All covenants, agreements,
representations and warranties of the parties contained in this Agreement are
binding on and will inure to the benefit of Buyer or Seller, and their
respective successors and permitted assigns.

                                  ARTICLE 10
                                   EXPENSES

Each party will bear their own respective expenses, including, without
limitation, legal and accounting fees, in connection with the preparation and
negotiation of this Agreement and consummation of the transactions hereunder.

                                  ARTICLE 11
                                   NOTICES

All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed duly given: (i) when personally delivered,
(ii) upon receipt of a facsimile transmission with a confirmed transmission
answer back, (iii) three (3) days after having been deposited in the United
States mail, certified or registered, return receipt requested, postage prepaid,
or (iv) one (1) business day after having been dispatched by a nationally
recognized overnight courier service, addressed to the parties as follows:



                                      24

<PAGE>


To Buyer:   Local Telecom Systems, Inc.
            3535 West Seventh Street
            Suite 5
            Fort Worth, Texas 76107

To Seller:  Local Telecom Service, LLC.
            3535 West Seventh Street
            Suite 1
            Fort Worth, Texas 76107

Any party may change its address for notice purposes by giving notice of such
change of address in accordance with the foregoing provisions.

                                  ARTICLE 12
                                MISCELLANEOUS

            13.1 Waivers. Any failure by any of the parties to comply with any
of the obligations, agreements or conditions set forth in this Agreement may be
waived in writing by the other party or parties, but any such waiver will not be
deemed a waiver of any other obligation, agreement or condition contained
herein.

            13.2 Further Assurances. Each of the parties agrees to cooperate in
the effectuation of the transactions contemplated under this Agreement and to
execute any and all additional documents and take such additional action as is
reasonably necessary or appropriate for such purposes.

            13.3 Governing Law. This Agreement, the construction, interpretation
and enforcement hereof and the rights of the parties hereto shall be determined
under, governed by and construed in accordance with the laws of the State of
Nevada without regard to principles of conflicts of law.

            13.4  Entire Agreement.  This Agreement, including any certificate,
schedule, exhibit or other document delivered pursuant to its terms, constitutes
the entire agreement among the parties hereto regarding the subject matter
hereof and supersedes all previous agreements. There are no verbal agreements,
representations, warranties, undertakings or agreements among the parties. This
Agreement may not be amended or modified in any respect, except by a written
instrument signed by the parties to this Agreement.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first above written.

                              "Buyer"

                              LOCAL TELECOM SYSTEMS, INC.
                              a Nevada corporation

                              By:   /s William R. Miertschin
                                    -------------------------------------------
                              William R. Miertschin
                                    President

                                      25

<PAGE>


                              "Seller"

                              LOCAL TELECOM SERVICE, LLC.
                              a Texas Limited Liability Company

                              By:   Robert T. Hart
                                    -------------------------------------------
                                    Robert T. Hart
                                    President






                                      26

<PAGE>

                                  Exhibit A

                         Local Telecom Service, LLC

Service Provider Certificates of Operating Authority issued by State Public
Utility Commissions in Texas, New Mexico, Arizona, Mississippi and North
Carolina authorizing the sale of local and long distance telephone service.






                                      27

<PAGE>

                                                                 Exhibit 2(ii)

                              ARTICLES OF MERGER


Pursuant to the provisions of The General and Business Corporation Law of
Nevada, the undersigned corporations certify the following:

1.    That Local Telecom Systems, Inc. of Nevada and Signature Motorcars, Inc.
of Nevada are hereby merged and that the above-named Signature Motorcars, Inc.
is the surviving corporation.

2. That the Board of Directors of each of the above-named corporations met, and
by resolution adopted by a majority vote of the members of such boards approved
the Plan of Merger set forth in these Articles.

3. The Plan of Merger thereafter was submitted to a vote at a meeting of the
shareholders of each of the above-named corporations, and at such meeting the
following votes were recorded:


       Corporation          Number of Shares     Number Voting    Number Voting
                               Outstanding         for Plan        Against Plan


Signature Motorcars, Inc.        15,000,000         7,829,179                0

Local Telecom Systems, Inc.           1,000             1,000                0

4. The above-named surviving corporation also agrees that it may be served with
process in this state, and appoints CorpAmerica as its agent to accept service
of process in any proceeding based upon any cause of action against any such
Nevada corporation arising in this state prior to the issuance of the
certificate of merger. The address to which the service of process in any such
proceeding shall be mailed is:

202 North Curry Street, Suite 100, Carson City, Nevada 89703

5.    Following the merger the name of the surviving corporation was changed to
Local Telecom Systems, Inc.

6.    PLAN OF MERGER

      A.    Signature Motorcars, Inc., now known as Local Telecom Systems, Inc.,
            of 3535 West Seventh Street, Suite One, Fort Worth, Texas 76107 is
            the survivor.
      B.    All of the property, rights, privileges, leases and patents of the
            Signature Motorcars, Inc. and Local Telecom Systems, Inc. are to be
            transferred to and become the property of Signature Motorcars, Inc.,
            the survivor.  The officers and board of directors of the above-
            named corporations are authorized to execute all deeds, assignments,
            and documents of every nature which may be need to effectuate a full
            and complete transfer of ownership.
      C.    The officers and board of directors of Signature Motorcars, Inc.
            shall continue in office until their successors are duly elected and
            qualified under the provisions of the bylaws of the surviving
            corporation.


                                      28

<PAGE>


      D.    The outstanding shares of Local Telecom Systems, Inc. shall be
            exchanged for shares of Signature Motorcars, Inc. on the following
            basis: 1 share of Local Telecom Systems, Inc. for each 38,710 shares
            of Signature Motorcars, Inc.

7.    The Articles of Incorporation of the survivor are to be amended as
follows:

      The article to be amended, Article One of the Articles of Incorporation,
      states: The name of the corporation is Signature Motorcars, Inc.

      Article One is to be amended as follows: The name of the corporation is
      Local Telecom Systems, Inc.

      IN WITNESS WHEREOF, these Articles of Merger have been executed in
duplicate by the aforementioned corporations as of the day and year hereafter
acknowledged.

CORPORATE SEAL                      SIGNATURE MOTORCARS, INC.


                                    By:   /s/ William R. Miertschin
                                          -------------------------------------
                                          President


                                          William R. Miertschin
                                          -------------------------------------
                                          Printed Name                 Date

ATTEST:

/s/ Victoria L. Lucas
----------------------------------------------
Victoria L. Lucas, Secretary


CORPORATE SEAL                      LOCAL TELECOM SYSTEMS, INC.

                                    By:   /s/ William R. Miertschin
                                          -------------------------------------
                                          President

                                          William R. Miertschin
                                          -------------------------------------
                                          Printed Name                Date
ATTEST:

/s/ Tracey Norris
Tracey Norris, Secretary

                                      29

<PAGE>


STATE OF TEXAS          )
                        )
COUNTY OF DENTON        )

      I, Melissa Eason, a Notary Public, do hereby certify that on March 14,
2002 personally appeared before me William R. Miertschin who being by me first
duly sworn, declared that he is the President of Signature Motorcars, Inc., that
he signed the foregoing documents as President of the corporation, and that the
statements therein contained are true.


      NOTARIAL SEAL OR STAMP              /s/ Melissa Eason
                                          -------------------------------------
                                          Notary Public

                                          My commission expires:______________

                                          My County of Commission:____________


STATE OF TEXAS          )
                        )
COUNTY OF DENTON        )

      I, Melissa Eason, a Notary Public, do hereby certify that on March 14,
2002 personally appeared before me William R. Miertschin who being by me first
duly sworn, declared that he is the President of Local Telecom Systems, Inc.,
that he signed the foregoing documents as President of the corporation, and that
the statements therein contained are true.


      NOTARIAL SEAL OR STAMP              /s/ Melissa Eason
                                          -------------------------------------
                                          Notary Public

                                          My commission expires:______________

                                          My County of Commission:____________



                                      30

<PAGE>

                                                                 Exhibit 10(i)

                      STOCK PURCHASE AGREEMENT - ALABAMA

THIS AGREEMENT is made and entered into this ___ day of August, 2002, by and
between Connect Holdings Corporation, a Nevada corporation (hereinafter referred
to as "Seller") and Local Telecom Systems, Inc. (hereinafter referred to as
"Purchaser");

                             W I T N E S S E T H:

WHEREAS, the Seller is the record owner and holder of the issued and outstanding
shares of the capital stock of CCCAL, Inc., (hereinafter referred to as the
"Corporation"), an Alabama corporation.

WHEREAS, the Purchaser desires to purchase said stock and the Seller desires to
sell said stock, upon the terms and subject to the conditions hereinafter set
forth;

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and in order to consummate the purchase and the
sale of the Corporation's Stock aforementioned, it is hereby agreed as follows:

1. PURCHASE AND SALE:

Subject to the terms and conditions hereinafter set forth, at the closing of the
transaction contemplated hereby, the Seller shall sell, convey, transfer, and
deliver to the Purchaser certificates representing such stock, and the Purchaser
shall purchase from the Seller the Corporation's Stock in consideration of the
purchase price set forth in this Agreement. The certificates representing the
Corporation's Stock shall be duly endorsed for transfer or accompanied by
appropriate stock transfer powers duly executed in blank, in either case with
signatures guaranteed in the customary fashion, and shall have all the necessary
documentary transfer tax stamps affixed thereto at the expense of the Seller.

The closing of the transactions contemplated by this Agreement (the "Closing"),
shall be held at 3535 West 7th Street, Suite 5, Fort Worth, Texas 76107 at 10
a.m., CDT, on Thursday, August 15, 2002, or such other place, date and time as
the parties hereto may otherwise agree.

2. AMOUNT AND PAYMENT OF PURCHASE PRICE.

The total consideration shall be the issuance of 280,000 shares of the
Purchaser's Common Stock.

3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby warrants and represents:

(a)  Organization and Standing.

      Corporation is a corporation duly organized, under the laws of the State
of Alabama and has the corporate power and authority to carry on its business as
it is now being conducted.

(b)  Restrictions on Stock.

                                      31

<PAGE>


i. The Seller is not a party to any agreement, written or oral, creating rights
in respect to the Corporation's Stock in any third person or relating to the
voting of the Corporation's Stock.

ii.  Seller is the lawful owner of the Stock.

iii. There are no existing warrants, options, stock purchase agreements,
redemption agreements, restrictions of any nature, calls or rights to subscribe
of any character relating to the stock, nor are there any securities convertible
into such stock.

4.  REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.

Seller and Purchaser hereby represent and warrant that there has been no act or
omission by Seller, Purchaser or the Corporation which would give rise to any
valid claim against any of the parties hereto for a brokerage commission,
finder's fee, or other like payment in connection with the transactions
contemplated hereby.

5. GENERAL PROVISIONS

(a) Entire Agreement.

This Agreement (including the exhibits hereto and any written amendments hereof
executed by the parties) constitutes the entire Agreement and supersedes all
prior agreements and understandings, oral and written, between the parties
hereto with respect to the subject matter hereof.

(b) Sections and Other Headings.

The section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

(c) Governing Law.

This agreement, and all transactions contemplated hereby, shall be governed by,
construed and enforced in accordance with the laws of the State of Texas. The
parties herein waive trial by jury and agree to submit to the personal
jurisdiction and venue of a court of subject matter jurisdiction located in
Tarrant County, State of Texas. In the event that litigation results from or
arises out of this Agreement or the performance thereof, the parties agree to
reimburse the prevailing party's reasonable attorney's fees, court costs, and
all other expenses, whether or not taxable by the court as costs, in addition to
any other relief to which the prevailing party may be entitled.

IN WITNESS WHEREOF, this Agreement has been executed by each of the individual
parties hereto on the date first above written.

SELLER:                                   PURCHASER:

CONNECT HOLDINGS CORPORATION              LOCAL TELECOM SYSTEMS, INC.


By:   /s/ Ten L. Snider             By:   /s/ William R. Miertschin
      --------------------------          -------------------------------------
      Ted L. Snider, President            William R. Miertschin, President



                                      32

<PAGE>

                                 STOCK POWER

                     Assignment Separate From Certificate

      FOR VALUE RECEIVED, the undersigned, Connect Holdings Corporation, a
Nevada corporation, hereby sells, assigns, transfers and delivers the One
Hundred (100) shares of the no par value common stock of CCCAL, Inc., an Alabama
corporation (the "Corporation"), standing in the undersigned's name on the books
of said corporation and representing all of the issued and outstanding shares of
the corporation to Local Telecom Systems, Inc., a Nevada corporation, and does
hereby irrevocably constitute and appoint the transfer agent of the Corporation
as attorney-in- fact to transfer said stock on the books of the corporation with
full power of substitution in the premises.


Dated: August 15, 2002


                          Connect Holdings Corporation

                                    By:   /s/ Ted L. Snider, Jr.
                                          -------------------------------------
                                          Ted L. Snider, Jr., President

Witness:

--------------------------------

--------------------------------





                                      33

<PAGE>

                                                                Exhibit 10(ii)

                           ASSET PURCHASE AGREEMENT


THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into effective as of
August ____, 2002 by and among LOCAL TELECOM SYSTEMS, INC., a Nevada corporation
("Buyer"), on the one hand, and CCCLA, INC., a Louisiana corporation, which is a
wholly owned subsidiary of CONNECT HOLDINGS CORPORATION, INC., Nevada
corporation.

                                   RECITALS

A.    Seller is engaged in the telecommunications business in Louisiana (the
"Business").

B.    Buyer desires to purchase, and Seller desires to sell to Buyer, all upon
the terms and conditions hereinafter set forth, certain of the assets of Seller.

      NOW, THEREFORE, the parties agree as follows:

                                  ARTICLE 1
                  SALE OF ASSETS; ASSUMPTION OF LIABILITIES

            1.1 Sale of Assets. On the terms and subject to the conditions in
this Agreement, Seller agrees to sell, convey, transfer, assign and deliver to
Buyer at the Closing (as hereinafter defined) all of the assets of the Seller
including but not limited to (a) Local CPCN licenses and (b) IXC licenses, the
("Subject Assets").

            1.2 Method of Conveyance and Transfer. Seller agrees that the
conveyance, transfer and delivery of the Subject Assets will be effected at the
Closing by Seller executing and delivering to Buyer appropriate bills of sale,
endorsements, transfers, and other instruments of transfer. Seller shall deliver
physical possession and control of the Subject Assets to Buyer at the Closing.

            1.3 Further Assurances. Seller, at any time and from time to time
after the Closing, upon request of Buyer, will do, execute, acknowledge and
deliver, all such further acts, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably required for the better conveying,
transferring, assigning, and delivering to Buyer, or to its successors and
assigns, and for aiding and assisting in collecting and reducing to possession,
all the Subject Assets.

                                  ARTICLE 2
                    PURCHASE PRICE; ALLOCATION OF CERTAIN
                  PRECLOSING RECEIPTS AND EXPENSES, PAYMENT

            2.1 Amount of Purchase Price. The entire consideration (the
"Purchase Price") for the sale, transfer and assignment by Seller to Buyer of
the Subject Assets and for the representations, warranties and covenants of
Seller set forth herein, shall be 280,000 shares of Buyer's common stock.


                                      34

<PAGE>

            2.2 Payment at Closing. At the Closing, Buyer shall pay to Seller
the amount owed pursuant to Section 2.1 in the form of 280,000 shares of Buyers
common stock.

                                  ARTICLE 3
                       REPRESENTATIONS, WARRANTIES AND
                     AGREEMENTS OF SELLER AND STOCKHOLDER

Seller represents and warrants to, and agrees with, Buyer as of the date hereof
and as of the Closing Date as follows:

            3.1 Organization and Standing. Seller is a corporation duly
organized, under the laws of the State of Louisiana. Seller has full power and
authority to carry on the Business as and where conducted and to own and operate
the Subject Assets at and where owned or leased and operated by it.

            3.2 Authority of Seller Consents. The execution, delivery and
consummation of this Agreement by Seller has been duly authorized in accordance
with all applicable laws and the Articles of Incorporation and By-Laws of
Seller, no further corporate action is necessary on the part of Seller or the
Board of Directors of Seller for the execution, delivery and consummation of
this Agreement by Seller and this Agreement constitutes the legal, valid and
binding obligation of Seller enforceable against it in accordance with its
terms. No approval or consent of any person, firm or other entity or
governmental body is or was required to be obtained by Seller for the
authorization of this Agreement or the consummation of the transactions
contemplated in this Agreement.

            3.3 Title to Assets: Condition of Assets. Seller owns and possesses,
and will own and possess as of the Closing Date, all right, title and interest
in and to the Subject Assets. Seller has and will have as of the Closing Date
the right, power and capacity to sell, convey, transfer, assign and deliver to
Buyer the Subject Assets. All of the Subject Assets are in Seller's possession
and under its control. All of the Subject Assets are in good operating condition
and repair and are fit for the purposes for which they are used.

            3.4 Licenses and Rights. Seller possesses all franchises, licenses,
easements, permits and other authorizations from governmental or regulatory
authorities (either domestic or foreign) and from all other persons or entities
that are necessary to permit it to engage in the Business as presently conducted
in and at all locations and placed where it is presently operating.

            3.5 Articles of Incorporation and By-Laws. True, accurate and
complete copies of the Articles of Incorporation and By-Laws or similar charter
documents of Seller, together with all amendments thereto, have been delivered
to Buyer.

            3.6 Material Misstatements or Omissions. No representations or
warranties made by Seller in this Agreement furnished or to be furnished to
Buyer in connection with the transactions governed by this Agreement, contain
any untrue statement of a material fact, or omit to state a material fact
necessary to make the statements of fact contained therein, in light of the
circumstances under which they were made, not misleading.





                                      35

<PAGE>

                                  ARTICLE 4
                   REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer warrants and represents to, and agrees with, Seller as follows:

            4.1 Organization and Good Standing of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, has full power and authority to carry on its business as and
where now conducted.

            4.2 Authority of Buyer. The execution, delivery and consummation of
this Agreement by Buyer has been authorized by the board of directors of Buyer
in accordance with all applicable laws and the Articles of Incorporation and
Bylaws of Buyer, and at the Closing Date no further corporate action will be
necessary on the part of Buyer to make this Agreement valid and binding on Buyer
and enforceable against Buyer in accordance with its terms.

            4.3 Execution, Delivery and Binding Effect. 'This Agreement has been
duly executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.

                                  ARTICLE 5
                               OTHER COVENANTS

            5.1 Conduct of Business. From and after the date of this Agreement
and through the Closing, Seller agrees that Seller will conduct the Business
only in the usual, regular and ordinary course of business. Without limiting the
generality of the foregoing, Seller shall not do or permit any of the following
without the prior written consent of Buyer:

                  (a)   any sale or transfer of any assets, or settlement,
cancellation or release of any indebtedness owing to Seller or of any other
claims of Seller;

                  (b) any amendment or termination of any contract, agreement or
license, to which Seller is a party or to which Seller or any of the assets of
Seller are subject or bound;

                  (c)   any loss, damage or destruction to the Subject Assets
(whether or not covered by insurance);

                  (d)   any transaction outside of the ordinary course of
business; or

                  (e)   Any agreement or commitment to do any of the foregoing.

            5.2 Confidentiality. Seller agrees to keep any information that it
receives from or relating to Buyer confidential and not to disclose such
information to third parties other than accountants, lawyers, bankers and
financial advisers necessary to complete the transactions contemplated by this
Agreement.

            5.3 Notice and Cure. Seller agrees to notify Buyer promptly in
writing of, and contemporaneously will provide Buyer with true and complete
copies of any and all information or documents relating to, and will use their
best efforts to cure before the Closing, any event, transaction or circumstance
occurring after the date of this Agreement that causes or will cause any


                                      36
<PAGE>

covenant or agreement of Seller in this Agreement to be breached or that renders
or will render untrue any representation or warranty of Seller in this
Agreement. Seller also will notify Buyer promptly in writing of, and will use
their best efforts to cure, before the Closing, any violation or breach of any
representation, warranty, covenant or agreement made by Seller in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement.

                                  ARTICLE 6
                 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligations of Buyer under this Agreement are, at its option, subject to
satisfaction of the following conditions at or prior to the Closing:

            6.1 The warranties and representations made herein by Seller to
Buyer shall be true and correct as of the Closing with the same effect as if
such warranties and representations had been made as of the Closing, and Seller
shall have performed and complied with all agreements and covenants contained
herein on its part required to be performed or complied with on or prior to the
Closing.

            6.2 Buyer shall have received such approvals, consents,
authorizations, waivers and permits from any person, necessary or appropriate in
order to enable Buyer to acquire the Subject Assets in the manner provided
herein without the imposition of any conditions which Buyer might reasonably
consider to be significant or adverse.

            6.3 All proceedings to be taken in connection with the consummation
of the transactions contemplated by this Agreement, and all certificates,
documents and instruments incidental thereto, shall be reasonably satisfactory
in form and substance to Buyer and its counsel and Buyer shall have received
copies of such documents and instruments as Buyer and its counsel may reasonably
request in connection with such transactions.

            6.4 Buyer shall have completed it due diligence investigation of
Seller and the results thereof shall be satisfactory to Buyer in its sole
discretion.

            6.5   Receipt of Documents by Buyer.  Seller shall have delivered to
Buyer:

                  (a) certified copies of resolutions duly adopted by the board
of directors of Seller approving this Agreement and the transactions
contemplated under it;

                  (b) Buyer shall have received from Seller a certificate dated
the Closing Date certifying that the conditions set forth in Sections 6.2
through 6.4 have been fulfilled.

            6.6 Instruments of Transfer and Delivery of the Subject Assets.
Seller shall have delivered to Buyer good and sufficient instruments of transfer
relating to the Subject Assets as required pursuant to Section 1.3. The
instruments of transfer shall be in form and substance reasonably satisfactory
to Buyer.





                                      37

<PAGE>


                                  ARTICLE 7
                                   CLOSING

The closing of the transactions contemplated by this Agreement (the "Closing")
will take place at the offices of Local Telecom Systems, Inc., 3535 West Seventh
Street, Suite 5, Fort Worth, Texas 76107 at 3:00 p.m. on or about August 15,
2002 or such other time and date mutually agreeable to the parties (the "Closing
Date"). If the Closing has not occurred by September 5, 2001, then this
Agreement will be deemed to have been terminated and abandoned, subject to the
legal rights and remedies of any party arising out of any other party's breach
of any of the provisions of this Agreement. The parties agree to use all
reasonable efforts to achieve the Closing.

                                  ARTICLE 8
                         SURVIVAL OF REPRESENTATIONS
                                AND WARRANTIES

            8.1 Survival of Representations and Warranties. Notwithstanding the
Closing of the transactions contemplated under this Agreement, or any
investigation made by or on behalf of Buyer or Seller, the representations and
warranties of Buyer and Seller contained in this Agreement or in any
certificate, schedule, chart, list, letter, compilation or other document
furnished pursuant to this Agreement, will survive the Closing.

                                  ARTICLE 9
                ASSIGNMENT, THIRD PARTIES, AND BINDING EFFECT

The rights of Seller under this Agreement are personal and are not assignable
nor are their duties delegable without the prior written consent of Buyer, and
any attempted assignment or delegation without such written consent will be null
and void. This Agreement and the rights and duties of Buyer hereunder are freely
assignable and delegable without the consent of Seller. Nothing contained in
this Agreement is intended to convey upon any person or entity, other than the
parties and their successors in interest and permitted assigns, any rights or
remedies under or by reason of this Agreement. All covenants, agreements,
representations and warranties of the parties contained in this Agreement are
binding on and will inure to the benefit of Buyer or Seller, and their
respective successors and permitted assigns.

                                  ARTICLE 10
                                   EXPENSES

Each party will bear their own respective expenses, including, without
limitation, legal and accounting fees, in connection with the preparation and
negotiation of this Agreement and consummation of the transactions hereunder.

                                  ARTICLE 11
                                   NOTICES

All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed duly given: (i) when personally delivered,
(ii) upon receipt of a facsimile transmission with a confirmed transmission
answer back, (iii) three (3) days after having been deposited in the United
States mail, certified or registered, return receipt requested, postage prepaid,

                                      38

<PAGE>


or (iv) one (1) business day after having been dispatched by a nationally
recognized overnight courier service, addressed to the parties as follows:

To Buyer:         Local Telecom Systems, Inc.
                  3535 West Seventh Street
                  Suite 5
                  Fort Worth, Texas 76107

To Seller:        CCCLA, INC.
                  1133 Empire Central Dr.
                  Dallas, Texas 75247

Any party may change its address for notice purposes by giving notice of such
change of address in accordance with the foregoing provisions.

                                  ARTICLE 12
                                MISCELLANEOUS

            13.1 Waivers. Any failure by any of the parties to comply with any
of the obligations, agreements or conditions set forth in this Agreement may be
waived in writing by the other party or parties, but any such waiver will not be
deemed a waiver of any other obligation, agreement or condition contained
herein.

            13.2 Further Assurances. Each of the parties agrees to cooperate in
the effectuation of the transactions contemplated under this Agreement and to
execute any and all additional documents and take such additional action as is
reasonably necessary or appropriate for such purposes.

            13.3 Governing Law. This Agreement, the construction, interpretation
and enforcement hereof and the rights of the parties hereto shall be determined
under, governed by and construed in accordance with the laws of the State of
Nevada without regard to principles of conflicts of law.

            13.4 Entire Agreement. This Agreement, including any certificate,
schedule, exhibit or other document delivered pursuant to its terms, constitutes
the entire agreement among the parties hereto regarding the subject matter
hereof and supersedes all previous agreements. There are no verbal agreements,
representations, warranties, undertakings or agreements among the parties. This
Agreement may not be amended or modified in any respect, except by a written
instrument signed by the parties to this Agreement.


                                      39

<PAGE>


IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first above written.
                              "Buyer"

                              LOCAL TELECOM SYSTEMS, INC.
                              a Nevada corporation

                              By:   /s/ William R. Miertschin
                                    -------------------------------------------
                                    William R. Miertschin
                                    President

                              "Seller"

                              CCCLA, INC.
                               a Louisiana corporation

                              By:   /s/ Ted L. Snider
                                    -------------------------------------------
                                    Ted L. Snider
                                    President



                                      40

<PAGE>

                                                               Exhibit 10(iii)

                           ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into effective as of
August ____, 2002 by and among LOCAL TELECOM SYSTEMS, INC., a Nevada corporation
("Buyer"), on the one hand, and CCCPA, INC., a Pennsylvania corporation, which
is a wholly owned subsidiary of CONNECT HOLDINGS CORPORATION, INC., Nevada
corporation.

                                   RECITALS

A.    Seller is engaged in the telecommunications business in Pennsylvania (the
"Business").

B.    Buyer desires to purchase, and Seller desires to sell to Buyer, all upon
the terms and conditions hereinafter set forth, certain of the assets of Seller.

      NOW, THEREFORE, the parties agree as follows:

                                  ARTICLE 1
                  SALE OF ASSETS; ASSUMPTION OF LIABILITIES

            1.1 Sale of Assets. On the terms and subject to the conditions in
this Agreement, Seller agrees to sell, convey, transfer, assign and deliver to
Buyer at the Closing (as hereinafter defined) all of the assets of the Seller
including but not limited to (a) Local CPCN licenses and (b) IXC licenses, the
("Subject Assets").

            1.2 Method of Conveyance and Transfer. Seller agrees that the
conveyance, transfer and delivery of the Subject Assets will be effected at the
Closing by Seller executing and delivering to Buyer appropriate bills of sale,
endorsements, transfers, and other instruments of transfer. Seller shall deliver
physical possession and control of the Subject Assets to Buyer at the Closing.

            1.3 Further Assurances. Seller, at any time and from time to time
after the Closing, upon request of Buyer, will do, execute, acknowledge and
deliver, all such further acts, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably required for the better conveying,
transferring, assigning, and delivering to Buyer, or to its successors and
assigns, and for aiding and assisting in collecting and reducing to possession,
all the Subject Assets.

                                  ARTICLE 2
                    PURCHASE PRICE; ALLOCATION OF CERTAIN
                  PRECLOSING RECEIPTS AND EXPENSES, PAYMENT

            2.1 Amount of Purchase Price. The entire consideration (the
"Purchase Price") for the sale, transfer and assignment by Seller to Buyer of
the Subject Assets and for the representations, warranties and covenants of
Seller set forth herein, shall be 300,000 shares of Buyer's common stock.



                                      41

<PAGE>


            2.2 Payment at Closing. At the Closing, Buyer shall pay to Seller
the amount owed pursuant to Section 2.1 in the form of 300,000 shares of Buyers
common stock.

                                  ARTICLE 3
                       REPRESENTATIONS, WARRANTIES AND
                     AGREEMENTS OF SELLER AND STOCKHOLDER

Seller represents and warrants to, and agrees with, Buyer as of the date hereof
and as of the Closing Date as follows:

            3.1 Organization and Standing. Seller is a corporation duly
organized, under the laws of the State of Pennsylvania. Seller has full power
and authority to carry on the Business as and where conducted and to own and
operate the Subject Assets at and where owned or leased and operated by it.

            3.2 Authority of Seller Consents. The execution, delivery and
consummation of this Agreement by Seller has been duly authorized in accordance
with all applicable laws and the Articles of Incorporation and By-Laws of
Seller, no further corporate action is necessary on the part of Seller or the
Board of Directors of Seller for the execution, delivery and consummation of
this Agreement by Seller and this Agreement constitutes the legal, valid and
binding obligation of Seller enforceable against it in accordance with its
terms. No approval or consent of any person, firm or other entity or
governmental body is or was required to be obtained by Seller for the
authorization of this Agreement or the consummation of the transactions
contemplated in this Agreement.

            3.3 Title to Assets: Condition of Assets. Seller owns and possesses,
and will own and possess as of the Closing Date, all right, title and interest
in and to the Subject Assets. Seller has and will have as of the Closing Date
the right, power and capacity to sell, convey, transfer, assign and deliver to
Buyer the Subject Assets. All of the Subject Assets are in Seller's possession
and under its control. All of the Subject Assets are in good operating condition
and repair and are fit for the purposes for which they are used.

            3.4 Licenses and Rights. Seller possesses all franchises, licenses,
easements, permits and other authorizations from governmental or regulatory
authorities (either domestic or foreign) and from all other persons or entities
that are necessary to permit it to engage in the Business as presently conducted
in and at all locations and placed where it is presently operating.

            3.5 Articles of Incorporation and By-Laws. True, accurate and
complete copies of the Articles of Incorporation and By-Laws or similar charter
documents of Seller, together with all amendments thereto, have been delivered
to Buyer.

            3.6 Material Misstatements or Omissions. No representations or
warranties made by Seller in this Agreement furnished or to be furnished to
Buyer in connection with the transactions governed by this Agreement, contain
any untrue statement of a material fact, or omit to state a material fact
necessary to make the statements of fact contained therein, in light of the
circumstances under which they were made, not misleading.





                                      42

<PAGE>


                                  ARTICLE 4
                   REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer warrants and represents to, and agrees with, Seller as follows:

            4.1 Organization and Good Standing of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, has full power and authority to carry on its business as and
where now conducted.

            4.2 Authority of Buyer. The execution, delivery and consummation of
this Agreement by Buyer has been authorized by the board of directors of Buyer
in accordance with all applicable laws and the Articles of Incorporation and
Bylaws of Buyer, and at the Closing Date no further corporate action will be
necessary on the part of Buyer to make this Agreement valid and binding on Buyer
and enforceable against Buyer in accordance with its terms.

            4.3 Execution, Delivery and Binding Effect. 'This Agreement has been
duly executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.

                                  ARTICLE 5
                               OTHER COVENANTS

            5.1 Conduct of Business. From and after the date of this Agreement
and through the Closing, Seller agrees that Seller will conduct the Business
only in the usual, regular and ordinary course of business. Without limiting the
generality of the foregoing, Seller shall not do or permit any of the following
without the prior written consent of Buyer:

                  (a)   any sale or transfer of any assets, or settlement,
cancellation or release of any indebtedness owing to Seller or of any other
claims of Seller;

                  (b) any amendment or termination of any contract, agreement or
license, to which Seller is a party or to which Seller or any of the assets of
Seller are subject or bound;

                  (c)   any loss, damage or destruction to the Subject Assets
(whether or not covered by insurance);

                  (d)   any transaction outside of the ordinary course of
business; or

                  (e)   Any agreement or commitment to do any of the foregoing.

            5.2 Confidentiality. Seller agrees to keep any information that it
receives from or relating to Buyer confidential and not to disclose such
information to third parties other than accountants, lawyers, bankers and
financial advisers necessary to complete the transactions contemplated by this
Agreement.

            5.3 Notice and Cure. Seller agrees to notify Buyer promptly in
writing of, and contemporaneously will provide Buyer with true and complete
copies of any and all information or documents relating to, and will use their
best efforts to cure before the Closing, any event, transaction or circumstance
occurring after the date of this Agreement that causes or will cause any


                                      43
<PAGE>


covenant or agreement of Seller in this Agreement to be breached or that renders
or will render untrue any representation or warranty of Seller in this
Agreement. Seller also will notify Buyer promptly in writing of, and will use
their best efforts to cure, before the Closing, any violation or breach of any
representation, warranty, covenant or agreement made by Seller in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement.

                                  ARTICLE 6
                 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligations of Buyer under this Agreement are, at its option, subject to
satisfaction of the following conditions at or prior to the Closing:

            6.1 The warranties and representations made herein by Seller to
Buyer shall be true and correct as of the Closing with the same effect as if
such warranties and representations had been made as of the Closing, and Seller
shall have performed and complied with all agreements and covenants contained
herein on its part required to be performed or complied with on or prior to the
Closing.

            6.2 Buyer shall have received such approvals, consents,
authorizations, waivers and permits from any person, necessary or appropriate in
order to enable Buyer to acquire the Subject Assets in the manner provided
herein without the imposition of any conditions which Buyer might reasonably
consider to be significant or adverse.

            6.3 All proceedings to be taken in connection with the consummation
of the transactions contemplated by this Agreement, and all certificates,
documents and instruments incidental thereto, shall be reasonably satisfactory
in form and substance to Buyer and its counsel and Buyer shall have received
copies of such documents and instruments as Buyer and its counsel may reasonably
request in connection with such transactions.

            6.4 Buyer shall have completed it due diligence investigation of
Seller and the results thereof shall be satisfactory to Buyer in its sole
discretion.

            6.5   Receipt of Documents by Buyer.  Seller shall have delivered to
Buyer:

                  (a) certified copies of resolutions duly adopted by the board
of directors of Seller approving this Agreement and the transactions
contemplated under it;

                  (b) Buyer shall have received from Seller a certificate dated
the Closing Date certifying that the conditions set forth in Sections 6.2
through 6.4 have been fulfilled.

            6.6 Instruments of Transfer and Delivery of the Subject Assets.
Seller shall have delivered to Buyer good and sufficient instruments of transfer
relating to the Subject Assets as required pursuant to Section 1.3. The
instruments of transfer shall be in form and substance reasonably satisfactory
to Buyer.






                                      44

<PAGE>


                                  ARTICLE 7
                                   CLOSING

The closing of the transactions contemplated by this Agreement (the "Closing")
will take place at the offices of Local Telecom Systems, Inc., 3535 West Seventh
Street, Suite 5, Fort Worth, Texas 76107 at 3:00 p.m. on or about August 15,
2002 or such other time and date mutually agreeable to the parties (the "Closing
Date"). If the Closing has not occurred by September 5, 2001, then this
Agreement will be deemed to have been terminated and abandoned, subject to the
legal rights and remedies of any party arising out of any other party's breach
of any of the provisions of this Agreement. The parties agree to use all
reasonable efforts to achieve the Closing.

                                  ARTICLE 8
                         SURVIVAL OF REPRESENTATIONS
                                AND WARRANTIES

            8.1 Survival of Representations and Warranties. Notwithstanding the
Closing of the transactions contemplated under this Agreement, or any
investigation made by or on behalf of Buyer or Seller, the representations and
warranties of Buyer and Seller contained in this Agreement or in any
certificate, schedule, chart, list, letter, compilation or other document
furnished pursuant to this Agreement, will survive the Closing.

                                  ARTICLE 9
                ASSIGNMENT, THIRD PARTIES, AND BINDING EFFECT

The rights of Seller under this Agreement are personal and are not assignable
nor are their duties delegable without the prior written consent of Buyer, and
any attempted assignment or delegation without such written consent will be null
and void. This Agreement and the rights and duties of Buyer hereunder are freely
assignable and delegable without the consent of Seller. Nothing contained in
this Agreement is intended to convey upon any person or entity, other than the
parties and their successors in interest and permitted assigns, any rights or
remedies under or by reason of this Agreement. All covenants, agreements,
representations and warranties of the parties contained in this Agreement are
binding on and will inure to the benefit of Buyer or Seller, and their
respective successors and permitted assigns.

                                  ARTICLE 10
                                   EXPENSES

Each party will bear their own respective expenses, including, without
limitation, legal and accounting fees, in connection with the preparation and
negotiation of this Agreement and consummation of the transactions hereunder.

                                  ARTICLE 11
                                   NOTICES

All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed duly given: (i) when personally delivered,
(ii) upon receipt of a facsimile transmission with a confirmed transmission
answer back, (iii) three (3) days after having been deposited in the United
States mail, certified or registered, return receipt requested, postage prepaid,

                                      45

<PAGE>


or (iv) one (1) business day after having been dispatched by a nationally
recognized overnight courier service, addressed to the parties as follows:

To Buyer:   Local Telecom Systems, Inc.
            3535 West Seventh Street
            Suite 5
            Fort Worth, Texas 76107

To Seller:  CCCPA, INC.
            1133 Empire Central Dr.
            Dallas, Texas 75247

Any party may change its address for notice purposes by giving notice of such
change of address in accordance with the foregoing provisions.

                                  ARTICLE 12
                                MISCELLANEOUS

            13.1 Waivers. Any failure by any of the parties to comply with any
of the obligations, agreements or conditions set forth in this Agreement may be
waived in writing by the other party or parties, but any such waiver will not be
deemed a waiver of any other obligation, agreement or condition contained
herein.

            13.2 Further Assurances. Each of the parties agrees to cooperate in
the effectuation of the transactions contemplated under this Agreement and to
execute any and all additional documents and take such additional action as is
reasonably necessary or appropriate for such purposes.

            13.3 Governing Law. This Agreement, the construction, interpretation
and enforcement hereof and the rights of the parties hereto shall be determined
under, governed by and construed in accordance with the laws of the State of
Nevada without regard to principles of conflicts of law.

            13.4 Entire Agreement. This Agreement, including any certificate,
schedule, exhibit or other document delivered pursuant to its terms, constitutes
the entire agreement among the parties hereto regarding the subject matter
hereof and supersedes all previous agreements. There are no verbal agreements,
representations, warranties, undertakings or agreements among the parties. This
Agreement may not be amended or modified in any respect, except by a written
instrument signed by the parties to this Agreement.



                                      46

<PAGE>


IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first above written.

                              "Buyer"

                              LOCAL TELECOM SYSTEMS, INC.
                              a Nevada corporation

                              By:   /s/ William R. Miertschin
                                    -------------------------------------------
                                    William R. Miertschin
                                    President

                              "Seller"

                              CCCPA, INC.
                              a Pennsylvania corporation

                              By:   /s/ Ted L. Snider
                                    -------------------------------------------
                                    Ted L. Snider
                                    President




                                      47

<PAGE>

                                                                Exhibit 10(iv)

                               PROMISSORY NOTE

Principal Balance:  $150,000.00           Date of Note:  December 30, 2000

      FOR VALUE RECEIVED, the undersigned Telkin Sheetmetal, Inc., located at
7313 Domino Lane, Houston, Texas 77076, promises to pay to the order of
Signature Motorcars, Inc. located at 7738 Forest Lane #102, Dallas, Texas 75230,
the sum of One Hundred Fifty Thousand & No/100's Dollars ($150,000.00), together
with interest thereon at the rate of 9.0% per annum on the unpaid balance. Said
sum shall be paid in the following manner:

      Quarterly payments of accrued interest only which are due within fifteen
      days after the end of each quarter of March 31, June 30, July 31,
      September 30 and December 30. Principal payments shall be paid in variable
      payments; the amount of principal paid shall not be less than 30% of the
      amount paid on Retainage Accounts, as listed on the schedule attached
      hereto as Exhibit A. These principal payments shall be paid within fifteen
      days upon receipt of said payments. This note shall mature and the entire
      principal and accrued interest shall be due and payable on December 30,
      2002.

      All payments shall be first applied accrued interest and the balance to
principal. This note may be prepaid, at any time, in whole or in part, without
penalty.

      This note shall at the option of any holder hereof be immediately due and
payable upon the occurrence of any of the following: 1) Failure to make any
payment due hereunder within fifteen (15) days of its due date. 2) Breach of any
condition of any security interest, mortgage, loan agreement, pledge agreement
or guarantee granted as collateral security for this note. 3) Breach of any
condition of any loan agreement, security agreement or mortgage, if any, having
a priority over any loan agreement, security agreement or mortgage on collateral
granted, in whole or in part, as collateral security for this note. 4) Upon the
death, incapacity, dissolution or liquidation of any of the undersigned, or any
endorser, guarantor to surety hereto; 5) upon the filing by any of the
undersigned of an assignment for the benefit of creditors, bankruptcy or other
form of insolvency, or by suffering an involuntary petition in bankruptcy or
receivership not vacated within thirty (30) days.

      In the event this note shall be in default and placed for collection, then
the undersigned agrees to pay all reasonable attorney fees and costs of
collection. Payments not made within five (5) days of due date shall be subject
to a late charge of 5% of said payment. All payments hereunder shall be made to
such address as may from time to time be designated by any holder.


                                      48

<PAGE>


      The undersigned and all other parties to this note, whether as endorsers,
guarantors or sureties, agree to remain fully bound until this note shall be
fully paid and waive demand, presentment and protest and all notices hereto and
further agree to remain bound, notwithstanding any extension, modification,
waiver or other indulgence or discharge or release of any obligor hereunder or
exchange, substitution, or release of any collateral granted as security for
this note. No modification or indulgence by any holder thereof shall be binding
unless in writing; and any indulgence on any one occasion shall not be an
indulgence for any other or future occasion. Any modification or change in
terms, hereunder granted by any holder, shall be valid and binding upon each of
the undersigned, notwithstanding the acknowledgment of any of the unsigned, and
each of the undersigned does hereby irrevocably grant to each of the others a
power of attorney to enter into any such modification of their behalf. The
rights of any holder hereof shall be cumulative and not necessarily successive.
This note venue shall be in Harris County, Texas and shall be construed,
governed and enforced in accordance with the laws of the State of Texas.

Without being limited thereto or thereby, this Note is secured by the following:
      (a)   Assignment of  Retainage- Accounts Receivable of Telkin Sheetmetal,
            Inc., as outlined in Exhibit A, hereto attached and
      (b)   Pledge of 150,000 shares of restricted shares of Black Giant Oil
            Company common stock, certificate # FWU 12601, in the name of
            Benjamin Botello, Trustee.

Borrower:  Telkin Sheetmetal, Inc.


---------------------------
Borrower

Name: _____________________
Title:   _____________________



                                      49

<PAGE>

                              SECURITY AGREEMENT

December 30, 2000


BE IT KNOWN, that for good and valuable consideration Telkin Sheetmetal, Inc. of
7313 Domino Lane, Houston, Texas 77076 (Debtor) grants to Signature Motorcars,
Inc. and its successors and assigns (Secured Party) a security interest pursuant
to Article 9 of the Uniform Commercial Code in the following property
(Collateral), which shall include all after-acquired property of a loke nature
and description and proceeds and products thereof:

      A) All Retainage Accounts Receivable of Telkin Sheetmetal, Inc. and all
      proceeds resulting from the payment of such accounts.
      B) 150,000 restricted shares of Black Giant Oil Company stock, certificate
      # FWU 12601.

Debtor hereby acknowledges to Secured Party that:

1.    The collateral shall be maintained at the Debtor's address and not moved
      or relocated without written consent.
2.    The Debtor warrants that Debtor owns the collateral and it is free from
      any other lien, encumbrance and security interest or adverse interest and
      the Debtor has full authority to grant this security interest.
3.    Debtor agrees to execute such financing statements as are reasonably
      required by Secured Party to perfect this security agreement in accordance
      with the state law and the Uniform Commercial Code.
4.    Upon default in payment or performance of any obligation for which this
      security is granted, or breach of any term of this security agreement,
      then in such instance Secured Party may declare all obligations
      immediately due and payable and shall have all remedies of a secured party
      under the Uniform Commercial Code, as enacted in the Debtor's state, which
      rights shall be cumulative and not necessarily successive with any rights
      or remedies.
5.    Debtor agrees to maintain such insurance coverage on the collateral as
      Secured Party may from time to time reasonably require and Secured Party
      shall be named as loss payee.
6.    This security agreement shall further be in default upon the death,
      insolvency or bankruptcy of any party who is an obligor to this agreement
      or upon any material

                                      50

<PAGE>


      decrease in the value of the collateral or adverse change in the financial
      condition of the Debtor.
7.    Upon default the Debtor shall pay all reasonable attorneys' fees and costs
      of collection necessary to enforce this agreement.

IN WITNESS WHEREOF, this agreement is signed this the 30 day of December 2000.

Debtor:  Telkin Sheetemtal, Inc.


-----------------------
Debtor





                                      51

<PAGE>

                               LIMITED GUARANTY

December 30, 2000


BE IT KNOWN, for good consideration and as an inducement for Signature
Motorcars, Inc. to extend credit from time to time to Telkin Sheetmetal, Inc.
the undersigned unconditionally guarantees to Creditor the prompt and punctual
payment of certain sums now or hereinafter due Creditor, provided that the
liability of the guarantor hereunder, whether singularly or collectively, shall
be limited to the sum of $150,000.00 as a maximum liability and guarantor shall
not be liable under this guarantee for any greater or further amount.

The undersigned guarantor agrees to remain fully bound on this guarantee,
notwithstanding any extension, forbearance, indulgence or waiver, or release or
discharge or substitution of any party or collateral or security for the debt.
In the event of default, Creditor may seek payment directly from the undersigned
without the need to proceed first against the borrower. Guarantor further waives
all surety ship defenses consistent with this limited guaranty. In the event of
default, the guarantor shall be responsible for all attorneys' fees and
reasonable costs of collection, which may be in addition to the limited guaranty
amount.

This guaranty shall be binding upon and inure to the benefit of the parties,
their successors, assigns and personal representatives.


Guarantor:


---------------------
Benjamin Botello


                                      52

<PAGE>

                                                                 Exhibit 10(v)

                               PROMISSORY NOTE

$50,000                                               Cisco, Texas
Dated:  March 27, 2000                                Maturity Date: On Demand

      FOR VALUE RECEIVED, BROADBAND WIRELESS INTERNATIONAL
CORPORATION, a Nevada corporation, with an address of 1301 Avenue M, Cisco,
Texas 76437 (the "Maker"), does promise to pay to the order of SIGNATURE
MOTORCARS, INC., with an address of 7738 Forest LN #102, Dallas, Texas 75230
(the "Holder"), at such place as may be designated by the Holder of this
promissory note (the "Note"), the principal sum of FIFTY THOUSAND and No/100's
Dollars ($50,000), at ten percent (10%) interest per annum. The principal and
interest of this Note shall be due and payable on demand of the Holder.

      Whenever any payment shall be due under this Note on a day which is not a
"Business Day" (as such term is hereafter defined), the date on which such
payment is due shall be extended to the next succeeding Business Day with the
same force and effect as if made on the date of payment. "Business Day" means a
day other than a Saturday, Sunday or other day on which national banks in Cisco,
Texas are authorized to be closed.

      Event of Default.  Except as set forth in the preceding section, the
failure to pay principal and interest when due shall be an event of default.

      Right of Prepayment. At any time from the date hereof to the due date, the
Maker may prepay the entire principal sum or any portion thereof, without
penalty or restriction.

      Amendment and Waiver. This Note may not be changed, modified or amended,
or terminated, nor may any of its provision be waived, except by an agreement in
writing signed by the party against whom enforcement thereof is sought.

      Collection. If this note is given to an attorney for collection, or if
suit is brought for collection or enforcement, or if it is collected through
probate, bankruptcy, or other judicial proceeding, then Maker shall pay Holder
all costs of collection and enforcement, including reasonable attorney's fees
and court costs, in addition to other amounts due.

      Jurisdiction and Venue. Maker and Holder irrevocably agree that venue for
any dispute or controversy arising between them or any person or entity in
privity therewith, out of the transactions effected and relationships created
pursuant to this Note including any dispute or controversy regarding the
formation, terms, or construction of this Note, regardless of kind or character
shall lie in any court of competent jurisdiction in Cisco, Texas.

      Governing Law. This Note shall be governed by and construed, enforced, and
administered in accordance with the laws of the state of Texas without regard to
its principles of conflicts of laws. This Note shall not be construed for or
against a party merely because that party prepared it, but will at all times be
construed according to its fair meaning.

      Promises Binding.  This Note shall be binding upon the Maker and its
successors and assigns.

                                      53

<PAGE>


      IN WITNESS WHEREOF, the Maker has caused this instrument to be duly signed
as of the date first set forth above.

                  BROADBAND WIRELESS INTERNATIONAL CORPORATION


                  By:   /s/ Ivan W. Webb
                        --------------------------------------
                        Ivan W. Webb, President

                                      54

<PAGE>


                                                                Exhibit 10(vi)

Nonrecourse                                           Dated: February 3, 2000
$151,000.00


                               PROMISSORY NOTE

FOR VALUE RECEIVED, Bryan Gossett, a resident of Texas ("Maker"), promises to
pay to Signature Motorcars, Inc., a Nevada Corporation ("Holder"), or order, One
Hundred and Fifty One Thousand Dollars ($151,000.00).

      1.    Payments. The principal on the obligation represented hereby (the
            "Principal") shall be repaid in one lump sum, payable on February 3,
            2003, which date is three years from the date hereof (the "Maturity
            Date").

      2.    Interest. This obligation shall bear simple interest, which shall be
            at the rate of 10% per annum, payable on the Maturity Date.

      3.    Type and Place of Payments. Payments of principal and interest shall
            be made in lawful money of the United States of America to the
            above-named Holder or his order at Maker's principal place of
            business.

      4.    Prepayment. Advance payment or payments may be made on the
            principal, without penalty of forfeiture. There shall be no penalty
            for prepayment.

      5.    Default. Upon the occurrence or during the continuance of any one or
            more of the events hereinafter enumerated, Holder or the holder of
            this Note may forthwith or at any time thereafter during the
            continuance of any such event, by notice in writing to the Maker,
            declare the unpaid balance of the principal and interest on the Note
            to be immediately due and payable, and the principal and interest
            shall become and shall be immediately due and payable without
            presentation, demand, protest, notice of protest, or other notice of
            dishonor, all of which are hereby expressly waived by Maker, such
            events being as follows:

            (a)   Default in the payment of the principal and interest of this
                  Note or any portion thereof when the same shall become due and
                  payable, whether at maturity as herein expressed, by
                  acceleration, or otherwise, unless cured within five (5) days
                  after notice thereof by Holder or the holder of such Note to
                  Maker.

            (b)   Maker shall file a voluntary petition in bankruptcy or a
                  voluntary petition seeking reorganization, or shall file an
                  answer admitting the jurisdiction of the court and any
                  material allegations of an involuntary petition filed pursuant
                  to any act of Congress relating to bankruptcy or to any act
                  purporting to be amendatory thereof, or shall be adjudicated
                  bankrupt, or shall make an assignment for the benefit of
                  creditors, or shall apply for or consent to the appointment of
                  any receiver or trustee for Maker, or of all or any
                  substantial portion of its property, or Maker shall make an


                                      55
<PAGE>

                  assignment to an agent authorized to liquidate any substantial
                  part of its assets; or

            (c)   An order shall be entered pursuant to any act of Congress
                  relating to bankruptcy or to any act purporting to be
                  amendatory thereof approving any involuntary petition seeking
                  reorganization of the Maker, or any order of any court shall
                  be entered appointing any receiver or trustee of or for Maker,
                  or any receiver of trustee of all or any substantial portion
                  of property of Maker, or a writ or warrant of attachment or
                  any similar process shall be issued by any court against all
                  or any substantial portion of the property of Maker, and such
                  order approving a petition seeking reorganization or
                  appointing a receiver or trustee is not vacated or stayed, or
                  such writ, warrant of attachment, or similar process is not
                  released or bonded within 60 days after its entry or levy.

      6.    Attorney's Fees. If this notice is placed with an attorney for
            collection, or if suit be instituted for collection, or if any other
            remedy permitted by law is pursued by Holder, because of any default
            in the terms and conditions herein, then in such event, the
            undersigned agrees to pay reasonable attorney's fees, costs, or
            other expenses incurred by Holder in so doing.

      7.    Construction. This Note shall be governed by and construed in
            accordance with the laws of the State of Nevada.

      8.    Security. Secured by 50% interest in 1500 acres more or less oil &
            gas mineral lease described further in attached Exhibit A.


                                  Bryan Gossett

                                          By:   /s/ Bryan Gossett
                                                -------------------------------
                                                Bryan Gossett


                                      56
<PAGE>

                                                                 Exhibit (vii)

                    MINUTES OF THE SPECIAL MEETING OF THE
                  SHAREHOLDERS OF SIGNATURE MOTORCARS, INC.


      A Special Meeting of the Shareholders of the above Corporation was held,
pursuant to a Waiver of Notice of said meeting dated February 22, 2002, at 7738
Forest Lane, Suite 102, Dallas, Texas 75230, on the 22nd day of February, 2002,
at 10:00 o'clock a.m. The following shareholders were present:

Priscilla Anderson                         150,000 shares
William R. Miertschin                    3,998,953 shares
Ivan Webb                                  417,408 shares
Victoria L. Lucas                          315,000 shares
Howard Siegel                              228,000 shares
Graford Communications Group             2,000,000 shares
Copano Bay Associates                      719,818 shares
                                         ----------------
      Total                              7,829,179 shares

      The meeting was called to order by William R. Miertschin, President of the
Corporation. William R. Miertschin, President of the Corporation, conducted the
meeting.
      The President declared that a quorum of the common shares was present and
that the meeting was duly organized. The Corporation has a total of 15,000,000
common shares issued and outstanding.
      The Secretary presented and read the notice of time, place, and purpose of
the meeting, signed by the President, which was ordered filed.
      The President requested and it was voted to ratify the minutes of the last
meeting of the Board of Directors.
      The President stated that the shareholders ratify the employment of Clyde
Bailey, PC, San Antonio, Texas as auditors for fiscal years 2000 and 2001 and to
retain the firm as auditors for fiscal year 2002.


MINUTES OF THE SPECIAL MEETING OF THE
SHAREHOLDERS OF SIGNATURE MOTORCARS, INC.                                     57

<PAGE>


      The President stated that it is in the best interest of the Corporation to
authorize a four (4) shares for five (5) share reverse stock split effective
February 22, 2002. The record date for shares affected by the reverse split
shall be February 19, 2002. The reverse stock split shall not affect either the
par value or the authorized capitalization of the Company.
      The President stated that it was in the best interest of the Corporation
to authorize a stock dividend of the common shares of International Royalty &
Oil, Inc. a wholly owned subsidiary of Signature Motorcars, Inc., a one to three
split on the basis of a 1 share of International Royalty & Oil, Inc. to be
issued to shareholders for every 3 shares held by the stockholders of Signature
Motorcars, Inc. as of the record date of February 19, 2002.
      The President further stated that it be in the best interest of the
Corporation to authorize a stock dividend of the common shares of Signature
Financial Services, Inc., a wholly owned subsidiary of Signature Motorcars, Inc.
to be issued to shareholders on the basis of a 1 share of Signature Financial
Services, Inc. for every 3 shares held by the stockholders of Signature
Motorcars, Inc. as of the record date of February 19, 2002.
      The President further stated it is deemed to be in the best interest of
the Corporation to authorize a stock dividend of the common shares of Cumberland
Continental Corp., Inc., a wholly owned subsidiary of Signature Motorcars, Inc.
on the basis of a 1 share of Cumberland Continental Corp, Inc. to be issued to
shareholders for every 3 shares of Signature Motorcars, Inc. as of the record
date of February 19, 2002.
      The President further stated it is deemed to be in the best interest of
the Corporation to authorize a stock dividend of the common shares of Signature
Healthcare., Inc., a wholly owned subsidiary of Signature Motorcars, Inc. on the
basis of a 1 share of Signature Healthcare, Inc. to be issued to shareholders
for every 3 shares of Signature Motorcars, Inc. as of the record date of
February 19, 2002.


MINUTES OF THE SPECIAL MEETING OF THE
SHAREHOLDERS OF SIGNATURE MOTORCARS, INC.                                     58

<PAGE>

      The President stated that it was in the best interests of the corporation
to effect a reverse merger with Local Telecom Systems, Inc., a Nevada
Corporation and that the name of the corporation be changed to Local Telecom
Systems, Inc.
      The President stated it is in the best interest of the corporation to
accept the resignations of Victoria Lucas and Howard Siegel as directors
effective immediately.
      An election of directors was held a the direction of the President,
William R. Miertschin. William R. Miertschin, Richard M. Hewitt and Tracey
Norris were nominated for directors. The nominations were closed and William R.
Miertschin, Richard M. Hewitt, and Tracey Norris were subsequently elected as
directors.
      Upon motion duly made by William R. Miertschin and seconded by Victoria
Lucas, the following resolution was unanimously adopted:

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation be authorized to
      effect a stock dividend of the shares of International Royalty & Oil Inc.
      to the shareholders of Signature Motorcars, Inc. on the basis as listed
      above. International Royalty & Oil, Inc. on a 1 share of Inc. for every 3
      shares of Signature Motorcars, Inc.

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation be authorized to
      effect a stock dividend of the shares of Signature Financial Services,
      Inc. to the shareholders of Signature Motorcars, Inc. on the basis as
      listed above.  Signature Financial Services, Inc. on a 1 share of
      Signature Financial Services, Inc. for every 3 shares of Signature
      Motorcars, Inc.

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation be authorized to
      effect a stock dividend of the shares of Cumberland Continental Corp, Inc.
      to the shareholders of Signature Motorcars, Inc. on the basis as listed
      above. Cumberland Continental Corp., Inc. on a 1 share of Cumberland
      Continental Corp, Inc. for every 3 shares of Signature Motorcars, Inc.

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation be authorized to
      effect a stock dividend of the shares of Signature Healthcare, Inc. to the
      shareholders of Signature Motorcars, Inc. on the basis as listed above.
      Signature Healthcare, Inc. on a 1 share of Signature Healthcare, Inc. for
      every 3 shares of Signature Motorcars, Inc.

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation to authorizes a four
      (4) shares for five (5) share reverse stock split.

      NOW, THEREFORE, IT IS RESOLVED, that the Corporation be authorized to
      issue 26,710,000 shares of its common stock in exchange for all of the
      outstanding common stock of Local Telecom Systems, Inc. effective
      immediately.  Local Telecom Systems, Inc. operates as a pre-paid local
      telephone reseller licensed in 45 states.


MINUTES OF THE SPECIAL MEETING OF THE
SHAREHOLDERS OF SIGNATURE MOTORCARS, INC.                                     59

<PAGE>

      NOW, THEREFORE, IT IS RESOLVED, that the name of the Corporation be
      changed from Signature Motorcars, Inc. to Local Telecom Systems, Inc. and
      to amend the Articles of Incorporation to reflect such change.

      NOW, THEREFORE, IT IS RESOLVED, that the auditing firm of Clyde Bailey,
      P.C., San Antonio, Texas be hired by the Company to audit year 2000, 2001
      and to be the auditors for year 2002.

      There being no further business matter before the meeting, upon motion
duly made seconded and unanimously adopted, the meeting was adjourned.

      SIGNED on this the 22nd day of February, 2002.


                                          /s/ William R. Miertschin
                                          -------------------------------------
                                          William R. Miertschin
                                          President and Shareholder

                                          /s/ Howard Siegel
                                          -------------------------------------
                                          Howard Siegel
                                          Shareholder

                                          /s/ Victoria Lucas
                                          -------------------------------------
                                          Victoria Lucas
                                          Shareholder

                                          /s/ Priscilla Anderson
                                          -------------------------------------
                                          Priscilla Anderson
                                          Shareholder

                                          /s/ Ivan Webb
                                          -------------------------------------
                                          Ivan Webb
                                          Shareholder

                                          /s/ Richard M. Hewitt
                                          -------------------------------------
                                          Richard M. Hewitt, General Partner
                                          Graford Communications Group

                                          /s/ Richard M. Hewitt
                                          -------------------------------------
                                          Richard M. Hewitt, General Partner
                                          Copano Bay Associates


MINUTES OF THE SPECIAL MEETING OF THE
SHAREHOLDERS OF SIGNATURE MOTORCARS, INC.                                     60

<PAGE>

                                                                    Exhibit 21

                 SUBSIDIARIES OF LOCAL TELECOM SYSTEMS, INC.

Subsidiary                    State of Incorporation
----------                    ----------------------

Local Telecom Services, LLC   Texas
CCCAL, Inc.                   Alabama
CCCAZ, Inc.                   Arizona
CCCCA, Inc.                   California
CCCCO, Inc.                   Colorado
CCCCT, Inc.                   Connecticut
CCCDE, Inc.                   Delaware
CCCDC, Inc.                   District of Columbia
CCCFL, Inc.                   Florida
CCCGA, Inc.                   Georgia
CCCID, Inc.                   Idaho
CCCIL, Inc.                   Illinois
CCCIN, Inc.                   Indiana
CCCIA, Inc.                   Iowa
CCCKS, Inc.                   Kansas
CCCKY, Inc.                   Kentucky
CCCMA, Inc.                   Massachusetts
CCCMS, Inc.                   Mississippi
CCCME, Inc.                   Maine
CCCMD, Inc.                   Maryland
CCCMI, Inc.                   Michigan
CCCMN, Inc.                   Minnesota
CCCMT, Inc.                   Montana
CCCND, Inc.                   North Dakota
CCCNE, Inc.                   Nebraska
CCCNV, Inc.                   Nevada
CCCNH, Inc.                   New Hampshire
CCCNJ, Inc.                   New Jersey
CCCNM, Inc.                   New Mexico
CCCNY, Inc.                   New York
CCCOH, Inc.                   Ohio
CCCOR, Inc.                   Oregon
CCCRI, Inc.                   Rhode Island
CCCSC, Inc.                   South Carolina
CCCSD, Inc.                   South Dakota
CCCTN, Inc.                   Tennessee
CCCUT, Inc.                   Utah
CCCVT, Inc.                   Vermont
CCCVA, Inc.                   Virginia
CCCWA, Inc.                   Washington
CCCWV, Inc.                   West Virginia
CCCWI, Inc.                   Wisconsin
CCCWY, Inc.                   Wyoming

Asset Purchase States

CCCLA, Inc.                   Louisiana
CCCPA, Inc.                   Pennsylvania


                                      61